The economic sanctions imposed on Russia after the invasion of Ukraine do not affect Cyprus to a large extent, since the island’s banking system is not connected to Russia, Finance Minister Konstantinos Petrides said, noting that Cyprus does not have reserves held by the Central Bank of Russia abroad, which are now frozen.
“Sanctions on the EU banking system do not affect Cyprus to a large extent, since the Cypriot banking system is not influenced by Russia,” Petrides told CNA.
The banking system, he added, “maintains one of the highest levels of capital adequacy and liquidity, and there is no cause for concern for any bank in Cyprus.”
Petrides also noted that the Central Bank of Cyprus has no reserves of the Russian Central Bank abroad, which are currently frozen due to sanctions.
“We have no exposure and no cause for concern,” he added.
In response to a question, the Minister of Finance said that it was premature for Cyprus to revise its macroeconomic forecasts for 2022 due to the crisis in Ukraine.
“Of course there will be some impact that we are trying to contain,” he said, noting that new flights from alternative destinations will be announced soon to offset the tourist flows from Russia and Ukraine.
He noted that the duration of the crisis is key in terms of the extent of the macroeconomic impact, noting that “Cyprus will be affected much less than other countries.”
However, Petrides noted that the macroeconomic impact is due to inflationary pressures due to rising oil and wheat prices, which “cannot be accurately estimated at this time.”
In addition, Petrides said that on Friday he will convene an Economic Advisory Committee, composed of the ministers of labor, energy and trade, the governor of the Central Bank and the social partners, to assess the economic situation.