UPDATE 1-Greek bank deposits fall to lowest level in a decade

29 May 2015 | Author: | No comments yet »

As bailout talks stall, Greek bank deposits fall to lowest level in more than a decade.

ATHENS, Greece – Greek bank deposits have fallen to their lowest in more than a decade, new statistics show, as Greeks worried about their new government’s painfully slow negotiations with creditors withdraw savings. The Greek government, European Union (EU) and International Monetary Fund (IMF) have been locked in negotiations for four months over economic reforms the IMF and EU say must be implemented before the latest €7.2bn tranche of the country’s bailout fund is released. Total deposits fell to €142.7 billion ($US156.4 billion) in April, down from €149 billion in March, data from the country’s central bank showed on Friday.

Athens has insisted in recent days it is close to a deal, indicating an agreement could come as soon as this weekend that would unlock desperately needed funds from its international bailout. Greece’s tortuous talks with its international lenders on a cash-for-reforms deal over the last four months has sparked uncertainty and fears of capital controls, unnerving savers. Athens is believed to have enough cash to cover a €300 million ($US328 million) repayment to the IMF on June 5, but probably won’t have enough cash to cover further payments later in the month. Deposits have been dropping steadily since October, with the liquidity squeeze making Greek banks dependent on emergency liquidity assistance (ELA) from the domestic central bank. Though there was a modest improvement between the middle of 2012 (when the euro crisis started to cool down) and the end of 2014 (when new elections were announced), deposits are now in free-fall again.

Bank of Greece data on Friday showed that business and household bank deposits fell by 3.5 per cent or €4.89 billion in April to €133.65 billion, dropping for the seventh month in a row.

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