Cyprus banks shut until Thursday
- Published: 26/03/2013 at 02:49 AM
- Online news:
All Cyprus banks are to remain shut until Thursday, the Central Bank announced in a shock statement issued late Monday as the country seeks to emerge from a financial crisis following a 17 billion euro bailout.
A woman rides her bike past a Laiki (Popular) Bank branch on March 25, 2013, in Nicosia. All Cyprus banks are to remain shut until Thursday, the Central Bank announced in a shock statement issued late Monday as the country seeks to emerge from a financial crisis following a 17 billion euro bailout.
Finance Minister Michael Sarris made the decision on the recommendation of the Central Bank Governor Panicos Demetriades in order to "ensure the smooth functioning of the entire banking system" the statement said.
The Central Bank had only hours earlier said all Cyprus banks except for its two biggest lenders, the worst-hit by the financial crisis, would reopen Tuesday after a 10-day lockdown for fear of a run on deposits.
In the earlier statement, it said Laiki Bank and the Bank of Cyprus would remain shut until Thursday due to their restructuring and merger under the bailout condition, but that all other banks would operate normally.
The decision to reopen most banks came after Cyprus agreed a deal with the International Monetary Fund (IMF) and European Union (EU) that threw the debt-stricken Eurozone member a 10 billion euro lifeline.
But stock markets reeled after the head of the Eurogroup, Dutch Finance Minister Jeroen Dijsselbloem, suggested the deal that rescued Cyprus, in which depositors in the two biggest banks will pay huge levies on deposits over 100,000 euros, could form the basis for future bailouts in the zone.
Hours later, the finance ministry decided to postpone the reopening of all banks.
"For the smooth functioning of the entire banking system the finance minister has decided on the recommendation of the governor of the Central Bank of Cyprus that all banks remain closed until Wednesday included," the statement said.
Even before the shock announcement, President Nicos Anastasiades had said there would be some limitations on what dealings customers could carry out at the banks that reopened.
"This is a very temporary measure, which will gradually be relaxed," he said in an address to the nation on his return from the Brussels talks with international creditors that clinched the deal to allow them to resume business.
"I can assure that we will do everything possible to return soon to complete normality."
About the author
- Writer: AFP
Position: News agency