Cyprus & World News

Cyprus expects to return to markets late next year, President says

10 April, 2014

Cyprus expects to return to international markets late next year but cannot rule out testing the waters earlier to gauge the appetite for Cypriot debt, President of the bailed-out Mediterranean nation said on Wednesday.

In an exclusive interview with Reuters, Cypriot President Nicos Anastasiades said an "economic dependency" on Russia - common with other EU member states - could have an impact, should the bloc decide to tighten sanctions on Moscow in its standoff with Ukraine.
He also said there should be offsetting measures for those countries whose economies could be directly hit if the crisis escalates and further sanctions are imposed. That could include leaving it to the discretion of member states over what additional curbs to apply, he said.

Just a year ago, Cyprus teetered on the brink of default from a banking system crippled by its exposure to Greece and a cash-starved government deprived of access to international markets. It became the first nation in the history of the euro zone to impose capital controls to prevent a collapse of its banking system. Cyprus lost a foothold in markets in May 2011 after yields on benchmark 10-year bonds spiked rapidly. But from a high of close to 15 percent last March, yields have now tumbled, quoted at 5.13 percent on Wednesday, according to Reuters Eikon data.
"We hope to be in a position to enter the markets towards the end of 2015. It is a very short period of time compared to countries under similar (bailout) programmes," said Anastasiades.

Asked if the Rrepublic could consider putting out feelers with a small issue beforehand, Anastasiades said that could be considered taking into account a further reduction in spreads.
"It is something which we could look at, at a time when we feel it would be successful to try," he said. Capital controls are gradually being dismantled, Anastasiades said. By the end of May domestic controls were expected to be fully eased, before full relaxation of transactions abroad by the end of the year.

"I believe we are on the right path...we have managed to overturn forecasts which were considerably worse than what we eventually achieved," the President said.