Fitch on Tuesday put Cyprus on rating watch negative, saying the shock from the country's banking system could damage the domestic economy and thus public finances.
The agency currently rates Cyprus B, a speculative rating.
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A painful European rescue plan for the island member of the euro zone has roiled financial markets this week, with large bank depositors penalized as part of the program.
"Fitch will seek to resolve the RWN once further key details of the program have been agreed and made public," the rating agency said in a statement.
(Reporting by Luciana Lopez; Editing by Chizu Nomiyama)