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S&P raises credit outlook of Cyprus to BB- from B+

Staff writer |
Standard and Poor's raised the long-term foreign and local currency sovereign credit ratings of bailed-out Cyprus to "BB-" from "B+" with a positive outlook, citing economic stability and the removal of capital controls.

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Standard and Poor's said the positive outlook means that it could raise the ratings in the next 12 months if there is economic growth and further stabilization of the financial sector, and a reduction of the government debt.

Cyprus was pulled back from the brink of economic meltdown in March 2013, in a three-year 10-billion-euro ($11.2 billion) economic adjustment program.

The eastern Mediterranean islands performed beyond estimates by its lenders, despite a parallel resolution of the banking system which involved the world's first bail-in: the recapitalization of its largest lender by turning 47.5 percent of large deposits into stock.

The ministry of finance has said it expects the economy to return to a growth of over 1 percent this year after three years of contraction.

It also has said Cyprus will exit its bailout program in March next year, though it will continue applying reform measures.

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