Moody's Investors Service has downgraded Ukraine's government bond rating to Caa2 from Caa1 and assigned a negative outlook, according to a press release posted on the government's Web site on Saturday.

The decision to downgrade Ukraine's sovereign rating was driven by the escalation of social and political tensions in the country, and the associated risk of a severe administrative crisis and/or prolonged political uncertainty, according to the press release.

Another reason for downgrading the rating is the increased risk of a sharp rise in external liquidity needs due to rising demand for foreign currency by the Ukrainian population amid the political crisis and the recent weakening of the hryvnia

Another factor is heightened uncertainty regarding the predictability of the external liquidity support from Russia, Moody's Investors Service said.

On January 28, Standard & Poor's lowered Ukraine's sovereign rating to 'CCC+' from 'B-', changing also its outlook to 'negative' from 'stable', the agency said in a statement.

"In our view, the political instability in Ukraine has significantly escalated. We now assess Ukraine under our criteria as exhibiting characteristics of a "distressed civil society with weakened political institutions," diminishing the government's capacity to maintain timely debt service," reads the statement.

At the same time, S&P affirmed the long- and short-term local currency sovereign credit ratings at 'B-/B' and the outlook is negative.