Fitch Ratings argued that in a statement that Cyprus’s decision to exit its three-year EU-IMF program ahead of schedule without a precautionary post-program credit line reflects the sovereign’s comfortable cash position and strong debt management, which limit refinancing risks.
The government concluded the macroeconomic adjustment program on March 7, two months ahead of the scheduled IMF and a few weeks ahead of the EU expirations.
Having completed the penultimate review in January, Cyprus used only 7.3 billion of the total 10 billion euros available to it since the program was mandated in 2013.
The government’s cash buffer, at over 1 billion as of end-January, will cover the country’s financing needs of around 1 billion for 2016.
Debt management operations aimed at extending maturities further reduce refinancing risks during this post-program period, noted Fitch.
In November 2015 Nicosia raised 1 billion on the international capital markets and used around half of the proceeds to buy back existing debt.