Standard and Poor’s downgrades Cyprus

Standard and Poor's downgraded Cyprus' credit rating from A+ to A, according to Minister of Finance Charilaos Stavrakis, who said that although the decision was negative, the government had covered its borrowing needs from abroad for the next few months and thus the downgrading would not have a direct impact on the taxpayer.

Stavrakis said Standard and Poor's had cited the large size of the banking sector in Cyprus, the activities of Cypriot banks in Greece and the exposure of banks to investments in Greek state bonds.

He expressed the confidence of the government in the Cypriot banking system and his satisfaction over the positive reference of Standard and Poor's to the 2011 state budget.

Stavrakis noted that Standard and Poor's shared the government's projections for a 6% deficit for 2010 and 4.5% for 2011.