Bank of Cyprus emergency liquidity funding declines by â‚¬170 million in May

Bank of Cyprus`s emergency liquidity assistance (ELA) declined by €170 million in May, figures released by the Central Bank of Cyprus show. The ELA funding declined from €9.400.082.000 in April to €9.230.078.000 in May.

This is the second largest reduction of ELA since last December when it was reduced by €224 million.

Furthermore, liquidity from ECB`s monetary operations remained in May at the same level as the previous month, to € 1.400.000.000.

The CBC also holds gold reserves of € 419,3 million at the same level with the previous month.

Cypriot banks` reliance on ELA funding peaked to €11.40 billion in March 2013 amid capital outflow in view of the agreement between the Cypriot authorities and the European Commission, the European Central Bank and the IMF on a €10 billion bailout which featured a haircut on banking deposits over €100,000.

Under the bailout terms, Bank of Cyprus would absorb a part of Laiki Bank, the island`s second largest lender along with its €9.5 billion ELA liability. ELA funding entered a downward path when Bank of Cyprus exited from the resolution process and was reinstated eligible counterparty status for ECB funding. Since August dependence of the bank on the ELA followed a slow decline.