Cyprus Expected to Return to International Markets

The Cypriot Finance Minister, Harris Georgiades claimed on Saturday that Cyprus is to return to the international markets at the end of June, 18 months earlier than it was initially expected. “This is a very positive development for us. It’s a clear sign of trust towards our economy. Our liquidity will increase and we will be able to pull ourselves up,” said Georgiades, adding that its lenders, the European Commission, European Central Bank and the International Monetary Fund have already approved this move. On May 30, the Cypriot government decided to lift the last of domestic capital controls imposed right after the Eurogroup haircut, while on May 15, the European Bank for Reconstruction and Development (EBDR) agreed to help Cyprus.  Moreover, last month Cyprus’s 10-year bonds were trading at an interest rate below the 7.0 % threshold, the lowest since June 2011. In combination with the positive troika evaluation of Cyprus’s adjustment program, the Finance Ministry has decided to attempt the island’s return to international markets. Cyprus was excluded from the international market in May 2011 because of its oversized banks’ exposure to the Greek economy, and the inability to close fiscal gaps. The government asked for an international bailout almost two years later after receiving  a 2.5 billion euro loan from Russia. It was given a €10 billion bailout in March 2013 with an adjustment period of three years.

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