Standard & Poor's (S&P) cut its ratings on Ukraine by two notches on Wednesday, citing absence of political will for budget revisions required as part of the country's deal with the International Monetary Fund (IMF).

Ukraine's parliament gave initial approval on Wednesday to legislation needed to secure billions of dollars in aid from the IMF after the central bank said failing to act could result in default and spiralling inflation.

An aide to Ukraine's president said on Monday that Prime Minister Yulia Tymoshenko risked losing an IMF credit by attaching conditions to the adoption by parliament of financial measures required for the loan.