Despite the uncertainty surrounding the Cyprus bailout, both domestic and non-resident banks deposits rose in December according to figures released on Monday by the Central Bank of Cyprus.
Total deposits rose by EUR 215.8 mln to EUR 70,157.4 million (EUR 70.2 bln) in December from EUR 69,941.6 mln in November.
This increase made up one-third of the ground lost in October and November, when deposits fell by a cumulative EUR 750 mln as uncertainty grew about whether Cyprus would commit to a bailout. However, at EUR 69.9 bln, they still remained above the EUR 69.3 bln level in December 2011.
Confidence appears to have returned in December because the Cyprus government reached an in-principle agreement for what could be EUR 17.5 bln in financial assistance under the European Support Mechanism (ESM) in mid-November.
In December parliament passed a raft of austerity and other measures requested by the troika with unanimous backing for almost every one of the 23 pieces of legislation.
Non-resident deposits outside the eurozone rose in both euro terms and in dollar terms (the currency in which most of the non-resident deposits are denominated). They rose by EUR 553 mln to EUR 21.5 bln in November or by EUR 241 mln to 18.1 bln.
Domestic deposits increased by EUR 160 mln to EUR 43.3 bln, having dropped EUR 326 mln in November.
The only category that showed a decline was deposits from the eurozone, which fell EUR 497.4 mln to EUR 5.3 bln – the same the level they were in December 2011 before a flight from Greece pushed them up to a peak of EUR 6.6 bln in June.
It could be that this outflow from eurozone deposits was because they were returning to Greece. Greece saw an inflow of EUR 5 bln of deposits between November and December.
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