Credit Rating Agencies Confirm Evaluation Dates for Cyprus Amid Positive Trajectory

International credit rating agencies have revealed the scheduled dates for announcing their assessments of Cyprus' economic outlook in the upcoming year. Notably, the long-term creditworthiness of Cyprus has been on an upward trend, evident in positive evaluations from Standard and Poor's and Fitch Ratings in 2023.

Currently positioned three grades above the minimum investment-grade threshold, Cyprus holds a BBB High and BBB+ rating from DBRS Morningstar and Scope Ratings, respectively. Standard and Poor's, Moody's, and Fitch place Cyprus at BBB, Baa2, and BBB, reflecting a positive standing two grades above the investment-grade threshold.

The evaluation process kicks off with DBRS Morningstar on March 22, followed by Scope Ratings on May 10. Subsequent assessments occur on May 24 (Moody’s), June 7 (Fitch), and June 14 (Standard and Poor’s). The second round of evaluations begins in September and concludes in December, involving DBRS Morningstar, Scope Ratings, Moody’s, Fitch, and Standard and Poor’s.

These assessments take place amidst global uncertainties stemming from the ongoing conflict in Ukraine and the Gaza Strip, impacting sectors like shipping, hospitality, and tourism. There are expectations of central banks lowering key interest rates in the latter half of the year, influenced by inflation easing.

Despite global challenges, all rating agencies emphasize Cyprus' credit upgrade, attributing it to the nation's fiscal discipline, surpluses reducing the debt-to-GDP ratio, and sustained growth in a challenging economic environment. Focus areas for improvement include advancements in the banking system, profitability sustainability, and risk reduction in bank balance sheets, particularly in managing non-performing loans.

The evaluations also highlight the positive impact of the National Recovery and Resilience Plan on economic activity. Notably, the inclusion of Scope Ratings in this year's evaluations underscores the agency's role within the broader framework of the European Central Bank's External Credit Assessment Institutions, mitigating risks associated with securities used in monetary policy operations.

By fLEXI tEAM