YEREVAN, March 26. /ARKA/. Cyprus ordered banks to remain closed for two more days over fears of a run by customers trying to get their money out, after striking a pre-dawn bailout deal Monday that averted the country’s imminent bankruptcy.
The sudden midnight postponement of the much-anticipated Tuesday bank opening by all but the country’s two largest lenders was sure to hammer businesses already reeling from more than a week of no access to their deposits.
ATMs have been dispensing cash but often run out, and an increasing number of stores and other businesses have stopped accepting credit or debit cards. The two largest lenders, the struggling Laiki and Bank of Cyprus, have imposed a daily withdrawal limit of $130.
Cyprus clinched an 11th-hour deal with the 17-nation eurozone and the International Monetary Fund early Monday for a $13 billion bailout. Without it, the country’s banks would have collapsed, dragging down the economy and potentially pushing it out of the eurozone.
Under the deal, the country agreed to slash its oversized banking sector and inflict hefty losses on large depositors in troubled banks.
The country’s banks have been closed since March 16 to avert a run on deposits as the country’s politicians struggled to come up with a way to raise enough money to qualify for the bailout. An initial plan that would have raised 5.8 billion euros by seizing up to 10 percent of people’s bank accounts enraged depositors and was soundly rejected by lawmakers early last week. –0–
