International rating agencies announce Cyprus’ credit ratings milestones for 2024

International rating agencies have announced the dates for Cyprus’ long-term credit rating assessment in 2024 with two agencies, namely Standard and Poor’s and Fitch placing the economy’s rating on track for upgrade, as they assigned positive outlook in their last rating actions of 2023.

Cyprus’ rating is three notches above lower investment grade with DBRS Morningstar and Score ratings upgrading Cyprus to BBB High and BBB+ respectively, while Standard and Poor’s, Moody’s and Fitch ratings have assigned a ΒΒΒ, Βaa2 and BBB respectively, two notches above the lower investment grade.

DBRS Morningstar opens the ratings actions in 2024 on 22 March, with Scope ratings following with its own rating action, scheduled for 10 May. Moody’s announced that its first rating action is scheduled for 24 May, followed by Fitch on 7 June and Standard and Poor’s on 14 June.

The second batch of credit ratings will begin with DBRS Morning Star on 20 September, followed by Scope ratings on 25 October. On 22 November Moody’s is expected to issue its second rating action and the ratings cycle for 2024 will close with Fitch and Standard and Poor’s rating actions scheduled for 6 December and 13 December respectively.

All credit ratings said that they may upgrade the Cypriot credit rating if Cyprus continues fiscal discipline and maintains budget surpluses which will continue the ratio of public debt to GDP on a downward path, and if Cyprus continues satisfactory growth rate. Potential upgrade also hinges upon further progress in the island’s banking sector, with continued profitability and reduction of risks in the banks’ balance sheet and namely continued reduction in non-performing loans. The agencies also consider that growth could be bolstered with the implementation of the Recovery and Resilience Plan.

Rating actions in the European Union are governed by the CRA regulations, stipulating that the rating agencies should announce two dates for potential rating actions, while all publication dates are always on Fridays.

(Source: CNA)