Moody's cuts Cyprus' credit rating by 2 notches

International ratings agency Moody's has lowered Cyprus' sovereign credit rating by two notches, saying that the country's banks will likely need state support next year given their exposure to Greek government debt. In a statement on Friday, the agency said Cyprus was downgraded to BAA3 from BAA1, or just above junk status. The agency also warned of the possibility of further downgrades, citing the island nation's inability to borrow from international markets, which Moody's said was likely to force the Cypriot government to seek emergency funding from official sources. The agency also pointed to difficulties faced by the country's government in implementing reforms needed to ensure the sustainability of public finances.