Fitch Ratings cut its credit ratings for 10 Kazakh banks and financial institutions on Thursday, warning of mounting economic and banking problems.

It also put the country''s BBB- Issuer Default Rating on negative outwatch.

Kazakhstan moved towards nationalization of two of its biggest banks earlier this month, and director of Fitch sovereigns group Andrew Colquhoun warned problems were worsening.

"Financial stress on Kazakhstan''s banking system is intensifying and Fitch expects that the sovereign may soon have to deploy more of its fiscal capacity to alleviate the strain, potentially weakening its own finances," he said in a statement.

Kazakhstan''s economy is suffering a sharp adjustment after years of credit-fuelled growth, with the currency devalued by 25% earlier in the month and sovereign external assets down 7.2% since September, with export earnings from oil down as prices fall.