Over 50 bln in cash stashed away

Kathimerini English - - Front Page - EVGENIA TZORTZI

Over 50 bil­lion eu­ros in cash was stashed away in homes and safe de­posit boxes in July, the first full month when cap­i­tal con­trols were in force in Greece. Ban­knotes in cir­cu­la­tion went down by 400 mil­lion eu­ros in July com­pared with June, the month when they reached their high­est level in the last few years, at 50.5 bil­lion eu­ros.

The de­crease in July is linked to the cap­i­tal con­trols, which forced house­holds to spend a por­tion of the cash they had with­drawn and were keep­ing at home. Bank de­posits have fallen by 45-50 bil­lion eu­ros since late Novem­ber 2014.

Ac­cord­ing to the Bank of Greece, “net li­a­bil­i­ties re­lated to the al­lo­ca­tion of euro ban­knotes within the Eurosys­tem” went from 3.9 bil­lion eu­ros in Novem­ber 2014 to 22 bil­lion in July 2015. This was due to de­mand for fresh cash which was ei­ther cov­ered by ex­ist­ing re­serves or in­jec­tions from the Eurosys­tem.

In ad­di­tion, there is on av­er­age roughly 28.1 bil­lion eu­ros in cir­cu­la­tion in the Greek mar­ket at any one time, a fig­ure which has re­mained al­most sta­ble in re­cent months, with fluc­tu­a­tions of around 1 bil­lion eu­ros.

The value of phys­i­cal cash cir- cu­lat­ing in Greece is the high­est in the eu­ro­zone as a per­cent­age of gross do­mes­tic prod­uct, at 27.8 per­cent while other coun­tries av­er­age 6-8 per­cent.

At the same time, obli­ga­tions to the Eurosys­tem fell by 2.3 bil­lion eu­ros in July, when they to­taled 128.2 bil­lion eu­ros. The de­crease is a re­sult of the Euro­pean Cen­tral Bank’s de­ci­sion not to ex­tend emer­gency liq­uid­ity as­sis­tance (ELA) that month as it sus­pended sup­port pend­ing a deal and the coun­try was forced to im­pose cap­i­tal re­stric­tions to stem the fur­ther out­flow of de­posits.

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