Moody's, one of leading rating agencies, has reassessed the outlook of Cyprus to positive.

The agency cited an unexpected fiscal and economic performance over the past year as a reason, Deutsche Welle has reported.

Its government bonds are still rated Caa3, but the outlook is now "positive". Decreased government deficit was pointed as an example, as it was 5.4% of GDP in 2013, down from 6.4% the year before.

This week, steps toward implementing IMF's bailout deal were made with Limassol port's privatization procedure which was launched on Wednesday, March 19.

Last year, Cyprus received a bailout package worth EUR 10 B (more than half the size of its economy) in return for closing Laiki, its second-largest bank, and introducing a one-time tax on bank deposits.

The government in Nicosia is currently committed to lead the country through a privatization program which is supposed to reduce state sector's pressure on the budget.

Moody's has warned that there is a "still-elevated risk of Cyprus defaulting on its debt, or undergoing debt restricting over the medium term given the highly interrelated economic, banking sector and public finance risks it continues to face."

he move by Moody's comes amid a political deadlock in Cyprus, where a cabinet resigned over pressure to stop the privatization program, and amid fears that sanctions imposed on Russia over Crimea's standoff could affect the small island, which heavily relies on Russian investment and Russian bank assets.