LONDON, Nov 2 (Reuters) – Fitch downgraded Ethiopia deeper into junk territory on Thursday to CC from CCC-, citing gaps in the country’s external financing that it said increased its likelihood of a default.

Ratings in the CC bracket are seen as at imminent risk of default.

Fitch cut the rating for the country’s foreign currency debt, also citing the “probable risk of a default” as it pursues debt relief under the G20’s “Common Framework” agreement.

“The material decline in external liquidity and significant external financing gaps have increased the likelihood of a default event,” the ratings agency said in a statement.

Africa’s second most populous country has struggled with debt, which government figures pegged at $28.2 billion at the end of March, following a punishing two-year civil war that ended last year.

It requested a debt restructuring in early 2021 under the Common Framework deal set up during the COVID-19 pandemic to help low-income countries navigate debt crises.

Fitch said that delays to that Common Framework process, which includes China, and slow movement on a requested bailout from the International Monetary Fund, meant the country was desperately short of cash.

“Fitch expects bilateral liquidity relief to be insufficient to address the large financing gaps and improve debt sustainability in the medium term, in the absence of renewed financing from international financial institutions,” it said.