Fitch on Friday cut the rating on Ukraine's government debt to "CCC" from "B" following the Russian invasion of the country, which it said creates a "severe negative shock."
"The military invasion by Russia has resulted in heightened risks to Ukraine's external and public finances, macro-financial stability and political stability," Fitch said, noting the "high uncertainty" about the length of the conflict.
Moody's issued a warning that it could downgrade both Ukraine and Russia's debt ratings over the war, reported AFP.
Russian President Vladimir Putin unleashed a full-scale invasion of Ukraine on Thursday that has so far killed dozens of people, forced more than 50,000 to flee in just 48 hours and sparked fears of a new Cold War in Europe.
"These events represent a significant further elevation of the geopolitical risks that Moody's had previously highlighted, which is being accompanied by additional and more severe sanctions on Russia, potentially including those that could impact sovereign debt repayment," that agency said.
In justifying its downgrade, Fitch said, "there is high uncertainty over the extent of Russia's ultimate objectives, the length, breadth and intensity of the conflict, and its aftermath."
The agency noted Ukraine's "fairly low external liquidity relative" relative to its debt of $4.3 billion, and said, "expected capital outflows will further weaken its external financing position."
"The shock to domestic confidence is expected to have a severe impact on economic activity and the currency, fuelling inflationary pressure and macro-economic volatility," Fitch said.
"Public finances would additionally be impacted by greater military expenditure, and the ability to roll over domestic debt will be severely constrained."
Separately on Friday, the IMF said Kyiv had requested "emergency financing" from the Washington-based crisis lender on top of its existing $2.2 billion aid program.
