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Moody’s upgrades Cyprus – Malta

04/01/2008 10:52
The EMU accession led the international credit rating firm, Moody’s, to upgrade Cyprus and Malta. The firm announced that it upgraded the foreign and local currency government bond ratings of Cyprus to Aa3 from A1 and Malta to A1 from A2. The outlook on these ratings was changed to stable from positive.

Due to the euro area entry, the country ceilings for debt and bank deposits of both Cyprus and Malta were withdrawn and replaced with the Eurozone's regional Aaa ceilings, which have a stable outlook.

“Moody's views the adoption of the euro by Cyprus and Malta as a significant credit positive because it all but eliminates the risk of a currency crisis, thereby insulating their economies from external financial shocks," said Tristan Cooper, Vice President and Senior Analyst in Moody's Dubai office.

According to Moody’s, “in recent years, both countries have successfully implemented fiscal consolidation programmes that have narrowed their fiscal deficits and reversed the previous upward trend in their public debt. The gross general government debt burdens of Cyprus and Malta have now dropped just below the Eurozone average”.