Fitch downgrades Cyprus credit rating to BBB

The Fitch ratings agency has downgraded Cyprus’ credit rating by two notches to BBB with a negative outlook, leaving it two notches above junk status.

Wednesday’s downgrade from A- came after a similar move in May, when the agency cut the Mediterranean island’s rating by three notches due to Cypriot banks’ exposure to Greek sovereign debt.

Fitch said Wednesday’s move reflected “actual and anticipated fiscal slippage” and its expectation that the country will be unable to raise funds on the international debt market to refinance its debt.