Cyprus – Sovereign Ratings Upgraded; Outlook Revised to Stable

Cyprus – Sovereign Ratings Upgraded; Outlook Revised to Stable

Rating Action

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

Rating Rationale

The upgrade reflects the marked improvement in fiscal strength, including a sustained decrease in short- to medium-term fiscal risks. This is driven by higher-than-expected general government budget surpluses, low gross financing needs, and a faster than projected decline in government debt, with the debt-to-GDP ratio now projected to fall to around 56% by 2026. Proactive management of the debt maturity profile has helped reduce refinancing risks, while a growing cash buffer provides a strong safeguard…