Related
Cyprus averted panic withdrawals as banks opened for the first time in almost two weeks, with government controls on access to cash leading to orderly lines rather than runs on deposits.
“We expected much more people,” said Argyros Eraclides, manager of a Bank of Cyprus Plc branch in the Stavrou area of Nicosia. “Fortunately there are only some people who needed cash for the day, but customers reacted fantastically. We expected some people to be more aggravated.”
Banks opened at midday local time today, with lines of about 15 to 20 people waiting to enter branches in the Cypriot capital, and closed at 6 p.m. The Central Bank of Cyprus’s controls include a 300-euro ($383) daily limit on withdrawals and restrictions on transfers to accounts outside the country.
Cyprus’s lenders had been shut since March 16, when the European Union presented a proposal to force losses on all depositors in exchange for a 10 billion-euro bailout. That plan touched off protests and political upheaval on the island, and was rejected by the country’s parliament. A subsequent agreement closed down Cyprus Popular Bank Pcl (CPB), the second-largest lender, and imposed larger losses on uninsured depositors.
The controls will be in force for seven days, according to a statement from the Finance Ministry. The European Commission said in a statement today the control on capital movements must remain “proportionate” and be lifted as soon as possible.
President’s Thanks
President Nicos Anastasiades thanked Cypriots for maintaining calm as banks opened, with many savers heeding the government’s call not to rush to banks and seeking to avoid potential chaos. His cabinet today approved a 25 percent reduction in his salary and a 20 percent pay cut for themselves.
“The maturity and responsibility our people have shown today in their interactions with banks relays to all a clear message of optimism and certainty for the future,” Anastasiades said in an e-mailed statement from his office in Nicosia. “With the stance our people have shown that not only do we want but we can bring our country out of this difficult position.”
Security guards at banks in Nicosia were allowing about eight or nine customers in branches at any one time today, with lines forming after an initial push at the doors to get in. Many were older customers without cash-machine cards, while others were waiting to pay bills or deposit checks.
Needing Cash
“I only bought a few small items during these days to survive,” said pensioner Kyriakos Hadjisophocleos, 65, who was waiting in front of a Bank of Cyprus branch in Nicosia from 7:30 a.m. to get money to pay part of his 380-euro rent. “I had many coins saved up so I was using them. If the banks didn’t open today I would have had to borrow from some friends.”
At a branch of Russian Commercial Bank Ltd., owned by VTB Bank OJSC (VTBR), there were no queues. About 10 guards surrounded the branch. One said nobody was allowed into the bank without an appointment. Yuri Soloviev, VTB’s first deputy president, said today that while some clients may take money from their Cyprus accounts, it won’t hurt the bank’s balance sheet.
Stocks and the euro rose, with the single currency climbing 0.5 percent to $1.2841 as of 5:51 p.m. in Athens. Bonds gained in Spain, with the 10-year yield falling three basis points, or 0.03 percentage points, to 5.05 percent.
Controlling Money
The Cyprus Parliament last week gave wide-ranging powers to the central bank governor, Panicos Demetriades, and Finance Minister Michael Sarris, who spent the last days deciding which measures to implement.
They chosen include bans on terminating time deposits and cashing checks. Customers can transfer abroad at most 5,000 euros per month from a given financial institution. Euro banknotes were supplied to Cyprus as a precaution, a spokesman for the Bundesbank in Frankfurt said today.
“People have organized their budget for the week through the ATM machines and the radio has been calling on people not to run to the banks today,” Maria Kyriacou, a Cypriot ruling-party lawmaker, told Bloomberg Television.
Cypriot banks lost 1 billion euros in deposits in February amid rising uncertainty over the country’s ability to secure a bailout, European Central Bank data showed today.
No comments:
Post a Comment