Standard Poor’s Ratings Services has lowered its long-term sovereign credit rating on the Republic of Cyprus to ‘B’ from ‘BB’, the ratings agency reported.
SP has also affirmed its short-term sovereign credit rating on Cyprus at ‘B’.
“The long-term rating remains on CreditWatch with negative implications, where it was initially placed on August 1, 2012,” the agency said in a press release on Wednesday.
“The downgrade reflects our view that Cyprus’ creditworthiness has deteriorated since the last downgrade on August 2, 2012, as the government has not yet negotiated a support package, while external and fiscal risks have risen,” it said.
European countries’ credit ratings
According to SP, electoral considerations prior to the February 2013 presidential polls have contributed to policy inertia at a time when the country faces a banking crisis, in part triggered by the involvement of Cypriot banks in the restructuring of Greece’s debt in early 2012.