ATHENS, Jan 13 (Reuters) - Moody's Investors Service placed Cyprus's Aa3 government bond ratings on review for a possible downgrade, the rating agency said on Thursday.
Moody's said the rating could be adjusted downwards by more than one notch in view of a recent deterioration in Cyprus' fiscal situation, competitiveness issues and the Cypriot banking sector's exposure to macroeconomic stress in Greece.
Still, Cyprus' credit rating is likely to remain in the investment-grade A category, the rating agency said.
'While the Cypriot government has put forward a 2011 budget that appears to comply with its commitments under the EU's excessive deficit procedure, its plans do not address the structural issues that may undermine the government's financial strength over the medium to long term,' Moody's lead sovereign analyst for Cyprus Sarah Carlson said in a statement.
In November last year, Standard and Poor's downgraded its sovereign rating of Cyprus by one notch to A with a negative outlook, citing concerns of a spillover effect from Cypriot banks' exposure to debt-ridden Greece.
(Reporting by George Georgiopoulos) Keywords: CYPRUS MOODY'S/ (george.georgiopoulos@reuters.com ; +30 210 337 6437; Reuters Messaging: george.georgiopoulos.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Moody's said the rating could be adjusted downwards by more than one notch in view of a recent deterioration in Cyprus' fiscal situation, competitiveness issues and the Cypriot banking sector's exposure to macroeconomic stress in Greece.
Still, Cyprus' credit rating is likely to remain in the investment-grade A category, the rating agency said.
'While the Cypriot government has put forward a 2011 budget that appears to comply with its commitments under the EU's excessive deficit procedure, its plans do not address the structural issues that may undermine the government's financial strength over the medium to long term,' Moody's lead sovereign analyst for Cyprus Sarah Carlson said in a statement.
In November last year, Standard and Poor's downgraded its sovereign rating of Cyprus by one notch to A with a negative outlook, citing concerns of a spillover effect from Cypriot banks' exposure to debt-ridden Greece.
(Reporting by George Georgiopoulos) Keywords: CYPRUS MOODY'S/ (george.georgiopoulos@reuters.com ; +30 210 337 6437; Reuters Messaging: george.georgiopoulos.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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