Warning it could still make a bigger cut, credit ratings agency Moody’s has downgraded Cyprus by three notches. The island has gone from B3 to Caa3 with a negative outlook.
Citing the possibility of a government default, the island’s exposure to toxic debt from Greece and the need for recapitalisation of the banks, Moody’s is also concerned about a bailout that could be 17 billion euros – almost equivalent to Cyprus’ entire economic output.
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