The international rating agency Fitch Ratings has downgraded the outlook on Ukraine's long-term foreign currency issuer default rating (IDR) from "positive" to "stable" and affirmed the IDR at "B" level.

"Expectations for a longer period of escalation in tensions with Russia, heightened risk of conflict, tight financing terms, moderate capital outflows and weakening international reserves have heightened external financing risks since our previous review in August," the agency explained its decision in a release on Saturday night.

According to it, the "stable" forecast partly reflects the agency’s baseline scenario, according to which a full-scale military conflict with Russia will be avoided, and Ukraine’s somewhat greater access to microfinancial organisations and bilateral funding, together with macro-stability, strengthening fiscal and foreign exchange reserves, will allow in 2022 to mitigate the consequences of the current situation.

"There is a high degree of uncertainty about President Putin's immediate strategic goals, and the heightened risk of invasion reflects a long period of troop buildup along the Ukrainian border, weak prospects for agreement on key Russian demands, and an intensified U.S. preparatory response," Fitch said.

It justifies in part its base case of no full-scale military intervention on the likely economic, military, and geopolitical costs and risks to Russia, the lack of strong domestic support for such action, and, to a lesser extent, the potential for some limited political concessions as opposed to uncertain strategic gains.

"However, we expect an extended period of heightened tension and risk, and see a slightly higher likelihood of more limited military operations, such as in Donbas," the agency said.