Bangkok - Fitch downgraded Thailand's sovereign and local currency credit ratings Thursday in the wake of street violence and political upheaval earlier this week.

The credit agency lowered Thailand's long-term sovereign, or country, credit rating to BBB from its previous BBB+ status and its baht currency ratings to A- from A.

"The downgrade of Thailand's ratings reflects the deterioration in sovereign creditworthiness associated with the inability of successive governments to resolve disruptive civil unrest, which threatens to extend an already protracted period of political uncertainty," said Vincent Ho, Singapore-based associate director in Fitch's Sovereign Group.

Thailand has been suffering unprecedented political instability since 2006 when street protests first erupted against former prime minister Thaksin Shinawatra, whose strong-arm rule combined with populist policies deeply divided Thai society and continues to do so.

Thaksin was overthrown in a September 2006 coup, but Thailand remains split into anti- and pro-Thaksin camps, which have resorted to street protests since May to achieve their aims.

The last spate of protests, led by the pro-Thaksin red shirts, forced the government to cancel a regional summit over the weekend and ended with an army crackdown that left two people dead and 123 injured.

"The cumulative effect of repeated episodes of political disorder is a structural weakening of Thai governance, undermining the authority of the state and the credibility of the country's political leadership," Ho said.

Despite the downgrades, Fitch noted that Thailand's sovereign ratings are still supported by a sound fiscal position and strong external finances.

"The general government balance and debt-GDP ratio have been consistently better than the BBB peer group median in recent years," the agency noted.

It added that Thailand's ratio of external credit to gross domestic product is by far the largest of any BBB-rated sovereign. (dpa)