Fitch downgrades Cyprus 1 notch to B minus

Fitch downgrades Cyprus 1 notch to B minus on high risk of bailout plan going off track

Associated Press

NICOSIA, Cyprus (AP) -- International agency Fitch sent Cyprus' credit rating deeper into junk territory with a one-notch downgrade to B minus over heightened uncertainty gripping the debt-laden country's economy.

Fitch said in a statement Monday that there is a high risk that a €23 billion ($30 billion) bailout the country negotiated with its euro area partners and the IMF in March to rescue its deeply troubled banking sector and sagging economy could go off track.

The agency added that Cyprus cannot cope with addition shocks to its battered economy and warned of another possible downgrade.

The agency said that the country could experience a deeper recession than expected, while public debt will likely be higher than the 126 percent of gross domestic product that the rescue plan projects by 2015.

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