The government of Cyprus does not agree with the reasoning behind the downgrade of the Cypriot economy by the Fitch rating agency from AA- to A- with negative outlook. According to a press release by the Ministry of Finance, Fitch’s main reason for the downgrade is that the restructuring of the Greek debt may affect the Cypriot banking system and as a result, Cyprus’ public finances. The Central Bank of Cyprus (CBC) has also expressed its disagreement on the reasoning of Fitch’s decision.

“The government does not agree with the above assessment. The Cypriot banking system is particularly robust with high capital basis and very high cash flow rates and can cope with any theoretical scenario of restructuring the Greek debt”, a press release says.

It is added that even after the new Fitch rating, the Republic of Cyprus continues to remain in the upper middle class category. The government will continue working for the resolution of long – term economic problems and the consolidation of public finances, thus further strengthening the economy of Cyprus, the press release concludes.

“The Central Bank of Cyprus does not agree with the analysis of the rating agency but in any case it is taking measures to shield the Cypriot banking sector even further as it believes that the authorities of every state should be ahead of developments,“ a CBC release said.