CBC says UK exposure, Brexit impact on Cypriot banks limited

CBC says UK exposure, Brexit impact on Cypriot banks limited

CBC says UK exposure, Brexit impact on Cypriot banks limited

By Stelios Orphanides The Central Bank of Cyprus said that a weaker sterling caused by the UK’s exit from the European Union is likely to have a limited effect on the Cypriot banking system and, via tourism, the economy. The Cypriot banks’ exposure to the UK, which seven months ago, voted in a referendum in favour of leaving the EU, amounted to €3.4bn which accounted for 5 per cent of total assets on June 30, the central bank said in its annual financial stability report. Deposits held by Britons at Cypriot banks stood at €2.3bn or 4 per cent of total deposits. “Any change in the exchange rate of the sterling against the euro is expected to be mitigated because of the reverse impact that will cause on the assets and liabilities of the credit institutions,” the central bank said. “Cyprus, as an attractive destination for companies, anticipates to attract companies which will continue to be based in a EU-country” after Brexit. The central bank said that a weaker sterling, which following the referendum already lost 13 per cent of its value against the euro, could reduce the number of tourists from the UK, Cyprus’s largest source of incoming visitors as well as their spending. In the first 11 months of 2016 arrivals rose 12 per cent to 1,131,858, boosted partly by a combination of geopolitical tensions and increased flight connectivi…

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