DBRS confirms Cyprus’ ratings at BB and changes trend from stable to positive

DBRS Ratings Limited (DBRS) has confirmed Cyprus’ Long-Term ratings at BB (low) and changed the trend to positive from stable, according to an announcement issued on Friday. DBRS has also confirmed the Short-Term Ratings at R-4 and maintained the stable trend.

According to the rating agency, the positive trend reflects DBRS’s view that Cyprus’s solid fiscal and economic performances are likely to be maintained, leading to the further decline in the government debt-to-GDP ratio.

According to DBRS, the ratings reflect Cyprus’s solid fiscal performance achieved over the past few years, as well as its attractiveness as a business services centre and a tourist destination, its Eurozone membership � which has ensured financial support � and its enhanced public debt management framework that has reduced debt refinancing risks.

However, the ratings also underline the depth of Cyprus’s challenges, given its still high levels of private and public sector debt, sizable non-performing loans in the banking sector, external imbalances, and the small size of its service-driven economy, which exposes Cyprus to adverse changes in external demand, the DBRS press release concluded.

Source: Cyprus News Agency