ECB to charge Cyprus higher collateral haircut

Cyprus government bonds used as collateral in the European Central Bank’s refinancing operations will be given an extra 5 percent discount after rating agency Fitch downgraded the country’s rating, according to the ECB’s rules.

Fitch cut Cyprus’ credit rating by two notches to BBB on Wednesday due to fiscal slippages, saying the island state was likely to require a bailout to meet its funding needs.

The other two main rating agencies, Standard