Fitch cuts Cyprus rating on fears rescue program might fail

Rating agency Fitch on Monday cut Cyprus’s rating further into junk and warned more cuts could be on the way as an EU-IMF rescue program could fail.

The agency cut Cyprus’s long-term foreign currency issuer default rating to B- from B with a negative outlook due to the country’s elevated economic uncertainty.

Cyprus clinched a last-minute deal for a bailout program in March with the European Union and the International Monetary Fund.

“Cyprus has no flexibility to deal with domestic or external shocks and there is a high risk of the [EU-IMF] program going off track, with financing buffers potentially insufficient to absorb material fiscal and economic slippage,” Fitch said in a statement.