Cyprus Finance Minister upbeat ahead of Moody’s rating review

Cypriot Finance Minister Makis Keravnos on Wednesday expressed optimism regarding a potential upgrading of Cyprus’ credit rating to investment grade by the global rating agency Moody’s.

The minister’s comments come in anticipation of the scheduled assessment by the international rating agency set for September 29, 2023.

In response to inquiries following a ministerial council meeting, Keravnos stated that a delegation from Moody’s is currently in Cyprus engaging in discussions with Cypriot authorities.

The minister noted that Moody’s delegation is exploring various aspects of Cyprus’ economic policies, such as the intention to continue horizontal support measures, the retention of the public sector wage bill, and the policies to be implemented in the near future.

These policies, he explained, are vital for maintaining a sustainable economy and meeting the fiscal targets and requirements of the European Commission by the end of 2026.

“It was an in-depth discussion, and I remain optimistic,” stressed the Finance Minister.

It’s worth noting that Moody’s is the only one among the four internationally recognised credit rating agencies that has kept Cyprus’ long-term credit rating in the junk category for the past 12 years, following a profound economic crisis during the previous decade.

The other three agencies, S&P, Fitch, and DBRS Morningstar, upgraded Cyprus to investment grade in 2018, with their ratings being two notches higher than Moody’s.

Moreover, Moody’s reaffirmed Cyprus’ Ba1 credit rating with a positive outlook in its last assessment in August 2022.

An upgrade by Moody’s would signify a major milestone for Cyprus, potentially boosting investor confidence and offering the country greater access to international capital markets.

Such a development could also contribute to the ongoing efforts to strengthen Cyprus’ economic recovery and resilience.