Moody's credit rating agency said Russian banks and companies exposed to Cyprus risk losing billions of dollars should the island's government default on its debt obligations.
Moody's said there is a high probability of Cyprus defaulting, or at least the authorities being forced by the size of the debt to "pursue every avenue for debt reduction, including private-sector losses on Cypriot debt". Cyprus is a favoured offshore centre for Russian big business, thanks to its low taxes and light regulation. It ranks as the largest source of foreign direct investment into Russia - money that is largely Russian in origin.
Losing the possibility to repatriate the $19 billion - the amount estimated by Moody's in corporate deposits at Cypriot banks - could also affect the servicing of bank debt back in Russia.
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