Global ratings agency Fitch downgraded Ecuador deeper into junk territory on Wednesday, citing financing risks arising from a significant deterioration in fiscal accounts as the country heads to polls.

Ecuador's long-term foreign currency issuer default rating was cut to "CCC+" from "B-" by Fitch.

"Liquidity constraints have resulted in a sizeable build-up in arrears since YE 2022," the rating agency said. The country has leaned on international financing since its economy was battered by the COVID-19 pandemic.

The country's snap general elections are scheduled to be held on Aug. 20 amid nationwide turmoil following the assassination of presidential candidate Fernando Villavicencio at a campaign event earlier this month.

With increasing political risk and governability challenges, the rating agency said that it does not anticipate significant reform progress to address Ecuador's fiscal and financing challenges in the remaining 18-month presidential term.

This will continue to hinder the sovereign's market access and ability to secure an IMF successor program, Fitch added.

(Reporting by Akshita Toshniwal and Sri Hari N S in Bengaluru; Editing by Anil D'Silva)