Moody’s Maintains Stable Outlook on Cyprus’ Banking System

In its report published on 29 March 2023, the rating agency Moody’s maintained a stable outlook on Cyprus’ Banking System.

According to the report, Cyprus’ bank creditworthiness will remain stable as opposed to interest rate hikes and rising inflation which will slow down the economy and growth of loans in the year 2023.

In 2022, low unemployment and a bounce back in the tourism sector helped the Cypriot economy stay strong and outpace expectations.

The report suggests that funding and liquidity will remain strong supported by limited lending growth and stable deposits.

The Governor of the Central Bank of Cyprus, Constantinos Herodotou, stated that “Cyprus’ banking sector has significant liquidity and significant capital and does not have direct exposure to the events that have developed so far but we cannot be complaisant. Regarding the NPLs, timely and quick restructurings with creditworthy borrowers is beneficial for both the borrowers and the banks as well as the economy.”

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