Helena Izotova
Yesterday, Moody’s Rating Agency cut Cyprus ’s credit rating by 3 levels at a time – from САА3 down В3 – with a negative forecast. The experts say that the country is 2 steps away from default.
They underline that their decision was based on several factors, including the expected growth of the country’s public debt. Cyprus banks need urgent financial support. It means that Cyprus will have to spend much more money on the recapitalization of its banking system than expected. Therefore, the experts are sure that such a burden will eventually become unbearable for the country so it will have to default on its debt.
In summer 2012, Cyprus became the 4th eurozone country that addressed international lender to ask for financial aid. At the same time, more German politicians are against providing Cyprus with further financial support….
The chart below, courtesy of , reflects the current state of affairs in the market of EURUSD:
Helena Izotova
