Moody's upgrades Ukraine's credit rating

International rating agency Moody's Investors Service Inc. revised up Ukraine's credit rating by one level from Ca to Caa3, according to a report released by the agency here on Friday.

The outlook for the East European economy was changed from negative to stable, the report said.

According to the report, the upgrades were linked to the restructuring of 15 billion U.S. dollars of Ukraine's foreign debt and progress in political and economic reforms carried out under the auspices of the International Monetary Fund (IMF).

The rating company said that the easing of the debt burden has strengthened the country's external liquidity, while reforms have spurred rebalancing of the economy and reduced public and external financial deficits.

In the same time, the Moody's said Ukraine's economy remains exposed to risks associated with the still-heavy debt burden, substantial dependence on external lending, fragility of the banking system, unstable domestic political situation and challenging external environment.

As of Oct. 1, Ukraine's state foreign debt reached 70.7 billion U.S. dollars or about 76 percent of the country's gross domestic product.

The Ukrainian economy, which shrank 6.8 percent in 2014, is expected to further contract by 8.9 percent this year, before starting recovering in 2016. Endi