Moody's he cut to Caa2 the rating ceiling that the agency can give to the various entities based in Cyprus issuing bonds. The decision was announced yesterday in the late American afternoon, the late Italian evening. The country's rating (Caa3) and negative outlook remain unchanged.
Moody's said any decisions following the rating cap change will be announced in the coming weeks. A Cyprus exit from the Eurozone "would result in large losses for investors as a result of the redenomination of government and corporate bonds issued in light of Cypriot laws," Moody's said in a statement. Farewell to the status of member of the Eurozone, concludes the rating agency, "would also lead to a further worsening of the country's banking system and would represent an additional and acute factor against the real economy".
Also last Tuesday Fitch had cut (to B from AAA) the ceiling on the ratings of Cypriot bond issuers on which the agency issues reports. Fitch's rating on Cyprus (B) has been placed under review with negative implications. Last week S&Pinstead, it had cut the island's rating by one notch to CCC.
Meanwhile, the Nicosia Stock Exchange will remain closed even today and will not reopen until April 19st. Trading had been suspended on 15 March following the government's decision to keep the island's banks closed pending a decision by Parliament on the forced levy on bank deposits which had been proposed by the Eurogroup and which was then rejected . The last session of the Nicosia Stock Exchange was held on March XNUMXth.
Instead, there is a lot of waiting for the reopening of the banks after a 12-day blockage due to fear of capital flight after the agreement to save the island agreed by the Nicosia government with the Eurogroup, which provides for a heavy forced levy on some deposits. Queues of people waiting have already begun to form in front of some branches, mostly merchants and professionals with numerous checks in hand that they have not been able to deposit for almost two weeks.
Meanwhile, yesterday evening, four containers arrived in Cyprus from Europe containing a total of 5 billion euros in cash to guarantee liquidity for local banks. Loaded onto large trucks, the containers were transferred from Larnaca airport to the headquarters of the Central Bank in the capital with a 200-metre-long escort of armored personnel carriers, police motorcyclists and armed agents monitored from above by police helicopters .
