Cyprus Bankâ€™s ELA falls in August, ECB funding rises

Emergency Liquidity Assistance (ELA) from Cyprus Central Bank dropped by 1.25 billion Euros, according to Cyprus Central Bank’s data released on Monday. This is the first time the ELA falls below 10 billion Euros since last January and this is attributed to the increase of European Central Bank (ECB) funding to Cyprus’ Banks.

According to the data, ELA funding fell in August 2013 to 9.85 billion Euros from 11.10 billion in the previous month (July) and 11.00 billion in June 2013.
Reduced recourse to emergency funding was the result of the fact that as from August 1, Bank of Cyprus can obtain funds directly from the European Central Bank (ECB), after it exited the resolution regime on July 30.

Bank of Cyprus borrows from the ECB with more favorable terms, namely with a rate of 0.5% for main refinancing operations.
According to European Central Bank’s data, funding from ECB to Cypriot banks rose in August 2013 to 1.58 billion Euros from 354 million Euros the previous months.

The lower level of borrowing from ELA in 2013 was recorded last January when it stood at 9.09 billion Euros and the highest last March when it jumped to 11.4 billion Euros.