KIEV, Oct. 8 - The continued pressure on Ukraine's forex reserves and the fall in the price of its sovereign debt highlight the risk posed by its weak external finances, Fitch Ratings says.

Ukraine has one of the lowest external liquidity ratios among 'B' rated sovereigns and this is a key credit weakness, the ratings agency says.

The re-pricing of Ukrainian sovereign risk, which saw yields on 10-year dollar-denominated bonds move above 10% at the end of September, will make rolling over external public sector borrowing more difficult. The need to meet external debt repayments has already contributed to another fall in reserves, which dropped by $1.1 billion in August, to $21.7 billion, pushing them further below three months of imports. In September, reserves were relatively stable, at $21.6 billion. The government borrowed $750 million in a two-year syndicated loan. However, Fitch says it expects gross international reserves to continue to fall.