Cyprus credit rating has been lifted to B- from CCC+ with Standard & Poor’s keeping the islands outlook as stable. It is the first time in three years that Cyprus rating has been lifted.
Standard & Poor’s commented that the immediate risks relating to the austerity programme had receded and was confident that the goverment of Cyprus would continue to comply with the financial assistance programme, after already completing two reviews by TROIKA, successfully.
The President of Cyprus, Nicos Anastasiades responded to the changing rating, saying that the upgrade “is not only the result of painful sacrifices on behalf of the people, but also of the coherent and decisive policy” of his administration and all stakeholders during the past eight months. Anastasiades pledged that his government “will continue with the same prudent and disciplined policy to manage the difficulties ahead.”
“Even if I express my satisfaction, I do not believe that this is the time for exultation, but certainly similar messages, such as this by the rating agency, strengthen the gradual restoration of trust in the Cypriot economy, an element necessary to achieve the restarting of our economy the soonest possible,” Anastasiades added.
Standard & poor’s also commented that it could lower the islands rating “if the government appeared unable to fulfil the Troika’s conditions or if a large government financing gap emerged”.
The biggest risk to the islands compliance with the TROIKA conditions is the government’s privatisation targets.