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CI: Cyprus’ Sovereign Ratings Affirmed And Outlook Revised to Positive
September 20, 2021
Rating Action
Capital Intelligence Ratings (CI Ratings or CI) announced that it has affirmed the Republic of Cyprus’ Long-Term Foreign Currency Rating (LT FCR) and Short-Term Foreign Currency Rating (ST FCR) at ‘BB+’ and ‘B’, respectively. The Outlook for the ratings has been revised to Positive from Stable.
Rating Rationale
The revision of the outlook reflects strong prospects of recovery from the adverse impact of Covid-19 with real GDP returning to solid growth, tourism recovering faster than expected, and the public finances set to improve. The ratings are supported by declining refinancing risks in tandem with proactive public debt management. The government has secured its financing needs through uninterrupted access to capital markets while building a substantial cash buffer to counter short-term shocks. The ratings also take into consideration the benefits of the sovereign’s membership of the eurozone, including the recently endorsed Recovery and Resilience Facility (RRF) which has unlocked access to recovery funding.