Fitch upgrades Cyprus’ economy to BB-

Fitch ratings house has upgraded the long-term prospects of Cyprus, rating the country’s economy one grade higher at BB- from B+.

Additional upgrades were announced by the ratings house.
The issue ratings on Cyprus’s senior unsecured foreign and local-currency bonds have also been upgraded to ‘BB-‘ from ‘B+’. The Outlooks on the long-term IDRs are Positive. The Country Ceiling has been upgraded to ‘BBB-‘ from ‘BB+’ and the short-term foreign and local currency IDRs have been affirmed at ‘B’.

According to the reasoning behind the upgrades, they are a consequence of Cyprus continuing its economic recovery at a healthy pace.

At the same time, the country’s exit from the MoU is credited by the ratings house to the very good results of its programmed fiscal targets, the restructuring of the banking sector, and the successful and smooth abolition of capital controls.

According to Fitch, the country’s second consecutive year of economic recovery boosts employment and public finances.

The upgrade comes at an important moment for the economy, as both the government and the Ministry of Economics have repeatedly made it clear that it is crucial that Cyprus reach the investment grade, as it will lower the country’s borrowing costs and attract investments.

After the latest development, the country is three grades lower than investment grade according to the Fitch scale, two grades away according to Standard and Poor’s, and four grades away according Moody’s.