Cyprus – Sovereign Ratings Affirmed; Outlook Remains Stable

Rating Action

Capital Intelligence Ratings (CI Ratings or CI) today announced that it has affirmed the Long-Term Foreign Currency Rating (LT FCR) of the Republic of Cyprus at ‘BBB+’. At the same time, CI Ratings has affirmed the sovereign’s Short-Term FCR (ST FCR) at ‘A2’. The Outlook for the ratings remains Stable.

Rating Rationale

The ratings reflect the sustained strengthening of the public finances, marked by a continued decline in short- to medium-term fiscal risks. This improvement is underpinned by persistent general government budget surpluses, low gross financing needs, and a steady reduction in government debt. Active management of the debt maturity profile has helped mitigate refinancing risks, while a sizeable cash buffer offers a strong safeguard against near-term shocks and external adversities. The ratings also factor in the gradual decline in contingent liabilities linked to the banking sector, supported by a substantial reduction in…