The economic sanctions imposed against Russia following the invasion of Ukraine are not really affecting Cyprus as the island’s banking system has no exposure to Russia, Finance Minister Constantinos Petrides said.
“The sanctions concerning the EU banking system do not affect Cyprus to a large extent, as Cyprus’ banking system has no exposure to Russia,” Petrides stated. The banking system, he added, “maintains one of the highest levels of capital adequacy and liquidity ratios and there is no reason for concern for any Cypriot bank.”
Petrides also noted the Central Bank of Cyprus has no reserves held by the Russian Central Bank abroad, which are now frozen due to the sanctions.
“We have no exposure and there is no cause for concern,” he added.
The finance minister said it is premature for Cyprus to revise its macroeconomic projections for 2022 due to the crisis in Ukraine: “Surely there will be some impact which we are trying to mitigate,” he said, noting that new flights to and from alternative destinations will be announced soon, offsetting Russian and Ukrainian tourism flows. He noted that the duration of the crisis is key regarding the size of the macroeconomic impact.