OctaFX | OctaFX Forex Broker
Open trading account
Back

Details of Cyprus bailout plan still being mapped out

FXstreet.com (Barcelona) - European stocks opened higher on Monday as investor confidence was boosted by the last-minute bailout deal for Cyprus, hammered out overnight by EU officials. The agreement anticipates restructuring the country’s largest lender, the Bank of Cyprus, shutting the second largest bank Laiki, and taxing deposits exceeding 100,000 euros in exchange for the 10 billion euro aid.

It is possible that depositors at the Bank of Cyprus with holdings of over 100,000 euros will see a 30% haircut, but there is still no information on how much will the Laiki depositors lose.

The German finance minister, Wolfgang Schäuble, who spoke at a press conference today in Berlin, expressed his satisfaction with the Cyprus bailout deal, saying that imposing more losses on large depositors was the right thing to do. He also called for a quick reopening of Cypriot banks and declared that national EU parliaments should finalize their votes on the rescue package in the third week of April.

The BBH Global Currency Strategy Team however are not as enthusiastic about the deal: “Questions of democratic legitimacy will be raised by the fact that the package was shaped in such a way as to make it unnecessary for approval from the Cypriot parliament, which had the courage to block the president's previous Troika-endorsed plan. In addition, we suspect that the restructuring of the Cyprus economy away from its role as a financial center will be more expensive and a more prolonged process that currently anticipated. This warns that additional assistance is likely to be necessary. “

Forex Flash: Eurogroup deal with Cyprus as the best now possible – Commerzbank

Commerzbank analysts believe that the Eurogroup €10B agreement with Cyprus was the best now possible: “Initially it will be of interest to work out who gave in in the end. The answer to that question is more than obvious: Cyprus did. The banking sector will be restructured radically and the creditors of the banks will have to cover most of the costs”, wrote analyst Lutz Karpowitz, cheering Eurogroup’s steadfastness, positive for the euro as clear boundaries were set for future problem countries.
Read more Previous

Forex: EUR/USD trades below Friday’s close of 1.2991

After erasing early gains up to 1.3048, the new upside attempt during the European session peaked at 1.3019 and then the EUR/USD retraced back to Friday’s close at 1.2991 and is even trading below it. Data in the economic calendar has been delivered and the Eurogroup is still working on the details of the agreement with Cyprus.
Read more Next
Start livechat