Economic sanctions imposed on Russia following Ukraine invasion do not affect Cyprus to a large extent as island’s banking system is not exposed to Russia, finance minister says Constantinos Petrides, noting that Cyprus has no reserves held by the Russian Central Bank abroad. which are now frozen.
“The sanctions on the EU banking system do not affect Cyprus to a large extent, because the Cypriot banking system is not exposed to Russia,” Petrides told CNA.
The banking system, he added, “maintains one of the highest levels of capital adequacy and liquidity ratios and there is no cause for concern for a Cypriot bank.”
Petrides also noted that the Central Bank of Cyprus has no reserves held by the Russian Central Bank abroad, which are now frozen due to the sanctions.
“We have no exposure and there is no reason to worry,” he added.
Responding to a question, the Minister of Finance said that it was premature for Cyprus to revise its macroeconomic projections for 2022, due to the crisis in Ukraine.
“There will surely be an impact that we are trying to contain,” he said, noting that new flights to and from alternative destinations will soon be announced, which would offset tourist flows from Russia and other destinations. ‘Ukraine.
He noted that the duration of the crisis is critical to the magnitude of the macroeconomic impact, noting that “Cyprus will be much less affected than other countries.”
Petrides, however, noted that the macroeconomic impact is associated with inflationary pressures from rising oil and wheat prices “which cannot be accurately assessed at this time.”
In addition, Petrides said he would convene the Economic Advisory Committee on Friday in the presence of the ministers of Labour, Energy and Commerce, the Governor of the Central Bank and social partners to assess the economic situation.