CYPRUS is not giving priority to a sale of gold reserves under the international bailout agreed this month and is still exploring all options to meet its side of the deal, Finance Minister Harris Georgiades said in an interview.
Source from (Business Times): http://www.btimes.com.my/Current_News/BTIMES/articles/goldcyp23/Article/
Published: April 24, 2013
Georgiades said he anticipates currency controls, imposed after a chaotic bailout last month and which led to a lockdown of the banking system for 15 days, will be eased in "days or weeks".
Cyprus' agreement to sell ?400 million (RM1.5 billion) worth of its gold reserves was one of several shockwaves its progress towards a bailout sent through European financial markets earlier this month.
The amount is small but the precedent of a eurozone central bank being pushed to dispose of some of its reserves helped drive the biggest fall in gold prices in 30 years.
Investors worry central banks in some of the eurozone's struggling larger economies could eventually be pushed to follow Cyprus' example.
But while Georgiades said the gold sale is one of several commitments to the island's international lenders, he said it is not an issue that took priority.
"We shall do whatever it takes, we shall meet all fiscal targets. I am sure we shall succeed in gathering the amounts that remain our responsibility in order to avoid any need to come back with a new (adjustment) programme," Georgiades said.
Repeatedly declining to speculate on the timing of any disposal, he said the gold sale is "not even the most important, or the issue of the greatest magnitude" in the bailout deal, worth a total ?23 billion.
"It is something on the agenda, but it is not something we are tackling now," he said.
Asked whether Cyprus could reconsider the sale if it managed to find the amount elsewhere, Georgiades said: "So long as we are able to meet the financial element of our commitments I think all possibilities should be explored and they will be explored.
"The same applies not only for that particular issue but the whole framework of our commitments. What I feel it is necessary to repeat is our commitment for fulfilling everything without hesitation."
Teetering on the edge of default, Cyprus last month wound down its second largest bank and raided depositors' uninsured savings at another bank to fund a recapitalisation. Both banks were badly hit by their exposure to Greece.
It has to come up with most of the ?23 billion itself, with only ?10 billion made available by lenders and a fractious Parliament, which had rejected milder terms of a broad-based bail-in on bank depositors in March, will have to approve the bailout in coming days.
"I think Parliament will acknowledge there is no alternative at this point," Georgiades said, adding that most bailout terms, such as increasing corporate tax, spending cuts and tax increases, had already been approved virtually unanimously by lawmakers in by-laws.
Cyprus imposed capital controls at the end of March, worried about a flight of funds from a banking system flush with cash from Russian and European businesses, but also from many overseas Cypriots.
"I am pretty confident these necessary but temporary measures will not be needed in the next days or weeks," Georgiades said. Reuters
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