CB Governor’s suggestions to the Minister of Finance
The Central Bank Governor, Christodoulos Christodoulou, said that inflation is to surge to 4.5% for 2003 against the 3% that is expected to end in 2002.
Mr. Christodoulou noted that Cyprus is negatively affected by the economic recession worldwide, with growth rate to reach only 2% for 2002. Specifically, unemployment for 2002 is to reach 3.2%, the public debt excluding the intergovernmental debt will reach 57% of GDP, while total public debt is to reach 97% or CYP 6 billion.
As far as basic Lombard rates is concerned, the Central Bank will attempt to converge with the European Central Bank bringing Cyprus rates closer to European interest rates. The relevant decisions, however, are to be taken in December, the Governor said.
Meanwhile, surplus funds in commercial banks reached CYP 400 million, while banks’ deposits in Central Bank have now reached CYP 300 million. Free currency export has not yet led to currency export abroad, Mr. Christodoulou said.
Finally, the Governor called the Minister of Finance, Takis Klerides, to prepare an “emergency plan” in case of a US attack in Iraq, as 72% of Cyprus economic activity is based on the service sector, which needs to be secured.
The Central Bank Governor, Christodoulos Christodoulou, said that inflation is to surge to 4.5% for 2003 against the 3% that is expected to end in 2002.
Mr. Christodoulou noted that Cyprus is negatively affected by the economic recession worldwide, with growth rate to reach only 2% for 2002. Specifically, unemployment for 2002 is to reach 3.2%, the public debt excluding the intergovernmental debt will reach 57% of GDP, while total public debt is to reach 97% or CYP 6 billion.
As far as basic Lombard rates is concerned, the Central Bank will attempt to converge with the European Central Bank bringing Cyprus rates closer to European interest rates. The relevant decisions, however, are to be taken in December, the Governor said.
Meanwhile, surplus funds in commercial banks reached CYP 400 million, while banks’ deposits in Central Bank have now reached CYP 300 million. Free currency export has not yet led to currency export abroad, Mr. Christodoulou said.
Finally, the Governor called the Minister of Finance, Takis Klerides, to prepare an “emergency plan” in case of a US attack in Iraq, as 72% of Cyprus economic activity is based on the service sector, which needs to be secured.
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