There will be no significant impact on the Cyprus banking system from the economic sanctions imposed against Russia as Cyprus banks have minimal exposure to the Russian economy and the significant reduction of Russian deposits during the last years, Finance Minister Constantinos Petrides reiterated on Wednesday.

Petrides was speaking during an extraordinary virtual Council of the EU Finance Ministers who discussed the impact of the sanctions against Russia and the possible fallout to the European economy.

According to a press release issued by the Finance Ministry, Petrides also noted that Cyprus has no exposure to Russian sovereign bonds or any other investments in the Russian economy.

He stressed however that the EU decision to close its airspace to Russian aircrafts, will negatively affect tourist flows from Russia to Cyprus, which represent a significant portion of the annual tourist traffic.

The Cypriot Minister highlighted the need for non-EU countries to comply with the sanctions adopted, noting that a possible non-compliance on behalf of EU candidate countries such as Turkey is unacceptable as it would dilute the effectiveness of the sanctions while making gains at the expense of compliant countries.

Petrides also informed his counterparts of Cyprus’ decision to provide humanitarian aid to Ukraine as well as Nicosia’s readiness to host a number of refugees from the war-ravaged country.

According to the Finance Ministry, the Finance Ministers said that the EU sanctions have yielded a direct blow to the Russian economy.

With regard to the effects on the EU, it was said that the impact varies between the member-states with the main risks associated with the increase of inflation and especially in the prices of oil and wheat which will hit the European economies.

The Ministry said during the Council agreed to coordinate and monitor the developments while exploring counter measures.