La­garde says Cyprus bank­ing sys­tem is on solid foot­ing

The Pak Banker - - FRONT PAGE -

Ms. Chris­tine La­garde, Man­ag­ing Di­rec­tor of the In­ter­na­tional Mon­e­tary Fund (IMF) at the end of her Cyprus visit said, "she have re­ceived a let­ter from Mr. Har­ris Ge­or­giades, the Min­is­ter of Fi­nance for Cyprus, in­form­ing me of his govern­ment's de­ci­sion to can­cel the Ex­tended Fund Fa­cil­ity (EFF) ar­range­ment, ef­fec­tive March 7, 2016. The Fund's 36-month EFF ar­range­ment was sched­uled to ex­pire on May 14, 2016".

She con­grat­u­lated the peo­ple and the Govern­ment of Cyprus on their ac­com­plish­ments un­der the eco­nomic ad­just­ment pro­gram, which has de­liv­ered an im­pres­sive turn­around of the econ­omy dur­ing the past three years. The econ­omy re­turned to pos­i­tive growth last year, ex­pand­ing by about 1.5 per­cent. The bank­ing sys­tem is on a much more solid foot­ing and work­outs of non­per­form­ing loans are ac­cel­er­at­ing, open­ing space for new pro­duc­tive lend­ing. The fis­cal po­si­tion has been re­stored to a sus­tain­able path, and pub­lic debt is now firmly on a down­ward tra­jec­tory. In ad­di­tion, Cyprus re­gained ac­cess to in­ter­na­tional cap­i­tal mar­kets and suc­cess­fully is­sued three Eu­robonds dur­ing the past 21 months.

Build­ing on th­ese achieve­ments, the re­form mo­men­tum must con­tinue, es­pe­cially in view of the re­newed volatil­ity in global fi­nan­cial mar­kets. Fur­ther im­prov­ing fun­da­men­tals and sus­tain­ing ef­forts to strengthen the re­silience and flex­i­bil­ity of the Cypriot econ­omy are es­sen­tial to en­sure that the le­ga­cies of the fi­nan­cial cri­sis are left far be­hind.

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