International ratings agency Moody’s on Friday cut Cyprus’ credit grade by two notches to “Baa3,” or just above junk status, and warned of further downgrades because of the high likelihood that its heavily Greece-exposed banks will need state support next year.
Moody’s said in a statement that Cypriot banks’ losses would double under last month’s new European debt deal for Greece that would see banks write off 50 percent of the money the country owes them.
Those higher losses would make it more likely that the government would need to step in and provide a financial backstop of about 1 billion euros (US$1.38 billion), raising, in turn, the government debt-to-GDP ratio by 5 to 10 percentage points.
Cyprus’ top three banks hold an estimated 5 billion euros in Greek government bonds. Cypriot Finance Minister Kikis Kazamias said the island’s debt currently stands at about 65.5 percent of GDP.
Moody’s also cited the Cypriot government’s inability to borrow from international markets, which raises the possibility that authorities will need to seek emergency funding from official sources such as Europe’s bailout fund, known as the European Financial Stability Facility.
Rising interest rates on Cypriot bonds have made it increasingly difficult for the government to borrow from the secondary markets in order to finance the island’s debt and cover state costs.
Cyprus, a eurozone member since 2008 with a GDP of about 18.74 billion euros, has turned to Russia for a 2.5 billion euro loan agreement at a 4.5 percent annual interest rate, which is much lower than markets are currently offering.
SEMICONDUCTORS: The German laser and plasma generator company will expand its local services as its specialized offerings support Taiwan’s semiconductor industries Trumpf SE + Co KG, a global leader in supplying laser technology and plasma generators used in chip production, is expanding its investments in Taiwan in an effort to deeply integrate into the global semiconductor supply chain in the pursuit of growth. The company, headquartered in Ditzingen, Germany, has invested significantly in a newly inaugurated regional technical center for plasma generators in Taoyuan, its latest expansion in Taiwan after being engaged in various industries for more than 25 years. The center, the first of its kind Trumpf built outside Germany, aims to serve customers from Taiwan, Japan, Southeast Asia and South Korea,
Gasoline and diesel prices at domestic fuel stations are to fall NT$0.2 per liter this week, down for a second consecutive week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to drop to NT$26.4, NT$27.9 and NT$29.9 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to fall to NT$24.8 per liter at CPC stations and NT$24.6 at Formosa pumps, they said. The price adjustments came even as international crude oil prices rose last week, as traders
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which supplies advanced chips to Nvidia Corp and Apple Inc, yesterday reported NT$1.046 trillion (US$33.1 billion) in revenue for last quarter, driven by constantly strong demand for artificial intelligence (AI) chips, falling in the upper end of its forecast. Based on TSMC’s financial guidance, revenue would expand about 22 percent sequentially to the range from US$32.2 billion to US$33.4 billion during the final quarter of 2024, it told investors in October last year. Last year in total, revenue jumped 31.61 percent to NT$3.81 trillion, compared with NT$2.89 trillion generated in the year before, according to
PRECEDENTED TIMES: In news that surely does not shock, AI and tech exports drove a banner for exports last year as Taiwan’s economic growth experienced a flood tide Taiwan’s exports delivered a blockbuster finish to last year with last month’s shipments rising at the second-highest pace on record as demand for artificial intelligence (AI) hardware and advanced computing remained strong, the Ministry of Finance said yesterday. Exports surged 43.4 percent from a year earlier to US$62.48 billion last month, extending growth to 26 consecutive months. Imports climbed 14.9 percent to US$43.04 billion, the second-highest monthly level historically, resulting in a trade surplus of US$19.43 billion — more than double that of the year before. Department of Statistics Director-General Beatrice Tsai (蔡美娜) described the performance as “surprisingly outstanding,” forecasting export growth
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