The biggest credit agency Moody’s Corporation, has devalued the credit-worthiness of banks in Cyprus. The agency ranked Cyprus two scales less, from A2 to BAA1.
According to the agency, this is resulting from the general unstable situation prevailing at the fiscal policy of the state.
The sudden, tragic incident at the naval base played a role in the current situation. There has been unrest and general dissatisfaction, which has led to the devaluation of Cyprus.
The agency noted that there is always the danger that many Cypriot banks will have to be supported by the state, because of the cooperation with the Greek banks.
Moody’s gave the impression that further devaluation of Cyprus will probably follow, whilst the short term rating of Cyprus was devalued as well.
Today’s announcement on 27, July derives from an older announcement of the agency in May, noting back then, that Cyprus is under negative observation or potential devaluation.
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