NICOSIA, Cyprus (AP) — Moody’s credit ratings agency has driven Cyprus deeper into junk status with a two-notch downgrade to Ba3 over an increased likelihood that debt-crushed Greece will leave the eurozone.
Moody’s said in a statement Wednesday that it has placed Cyprus’ rating on review for further possible downgrade.
It says that a Greek euro exit would likely raise the amount of money that the government may need to support its heavily Greece-exposed banking sector.
The agency said the two-notch downgrade also reflects the fact that the eurozone country’s finances are already strained and that it can’t borrow from international markets.
Cyprus’ finance minister suggested Wednesday that the government could seek an European Union bailout to help recapitalize its banks before crucial elections in Greece this Sunday.