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Cyprus’ Sovereign Ratings Affirmed, Outlook Remains Stable
September 21, 2020
Capital Intelligence Ratings (CI Ratings or CI) today 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. At the same time, the Outlook for sovereign’s ratings was affirmed as Stable.
Rating Rationale
The ratings and Outlook reflect CI’s expectation that the economy will start to recover in the final quarter of this year from the disruption caused by the Covid-19 pandemic. The ratings are primarily underpinned by the pursuit of generally sound macroeconomic policies and relatively high GDP per capita, as well as the benefits derived from the country’s membership of the European Union and eurozone, including access to funding mechanisms recently established to help countries recover from the coronavirus-related downturn in economic activity. The ratings are also supported by proactive public debt management – which has helped to improve the debt structure in recent years – and adequate government access to capital markets.