* Capital controls could be eased in days or weeks
Cyprus seems to backing away from the 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.
Georgiades also said he anticipated currency controls, imposed after a chaotic bailout last month and which led to a lockdown of the banking system for 15 days would be eased in "days or weeks".
Cyprus' agreement to sell 400 mln euros 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 euro zone 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 euro zone's struggling larger economies could eventually be pushed to follow Cyprus' example.
But while Georgiades said the gold sale was one of several commitments to the island's international lenders, he said it was not an issue which took priority.
"We shall do whatever it takes, we shall meet all fiscal targets. I am sure we shall succeed in gathering the amounts which remain our responsibility in order to avoid any need to come back with a new (adjustment) programme," Georgiades told Reuters in an interview on Monday night.
FRACTIOUS PARLIAMENT
Teetering on the edge of default, Cyprus last month wound down Popular Laiki, its second largest bank and raided depositors' uninsured savings above 100,000 euros at Bank of Cyprus to fund a recapitalisation. Both banks were badly hit by their exposure to Greece.
The ‘haircut’ on deposits is expected to reach 44%, with the final amount concluded after Laiki’s operations and balance sheet is fully absorbed by Bank of Cyprus.
It has to come up with most of the 23 bln itself, with only 10 bln 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.
Now islanders are on a cash withdrawal limit of 300 euros a day and have a 2,000 euro ceiling on what they can take abroad, while businesses cannot make transfers exceeding 20,000 euros overseas unless they are vetted by the central bank.
Firms have complained the restrictions are stifling, while Russia has warned it will only restructure its own loan to the island if its interests here are protected.
"I am pretty confident these necessary but temporary measures will not be needed in the next days or weeks," Georgiades said.
Asked whether measures would be eased in two, or six months, Georgiades said: "Definitely not six months. I am optimistic we shall be able to proceed much sooner."
