Cyprus Welcomes Credit Upgrade

NICOSIA — Cyprus’ government has hailed rating agency Moody’s three-notch upgrade of the bailed-out country’s credit grade as validation of its adherence to the terms of its rescue.

Moody’s said the upgrade to B3 from Caa3 with a stable outlook reflects the government’s progress so far in shoring up the country’s finances and buttressing a hobbled banking sector.

Deputy government spokesman Victoras Papadopoulos said Saturday that Cyprus remains “firm and steady” to the terms of its 10 billion euro ($12.44 billion) bailout because the country isn’t out of the woods yet. Even with the upgrade, the rating is still “junk,” or non-investment grade.

Moody’s said Cyprus still faces a weak economic outlook and a burgeoning number of bad loans.

Rating agency Standard & Poor’s last month gave Cyprus a one notch upgrade.