Deposit outflows from Greek lenders slowed in March, staunching a run of steep declines that had fueled concerns about the country’s banking system as it battles to avert a sovereign default.
Banks’ deposits fell to 145 billion euros ($160 billion) from 147.5 bln euros in February, data from the European Central Bank showed on Wednesday.
That fall of 2.5 billion euros compares with outflows roughly ten times larger during the months from December to February, suggesting that those large Greek savers able to move their money abroad had already done so.
“March was a less turbulent month. Those with a higher propensity to channel funds out of bank deposit accounts had already done so in the previous months,” said analyst Nick Koskoletos at Athens-based Eurobank.
“As the deposits balance drops we are getting closer to the core base.”
Greece has yet to reach a new aid deal with its lenders and fears of a default have swirled during April as government debt repayment deadlines approach.
Bank of Greece data also showed a slower drop in household and business bank deposits in March, which however brought balances to their lowest level in 10 years.
This category of deposits fell by 1.91 billion euros or 1.36 percent month-on-month to 138.55 billion euros ($152.3 billion) from 140.47 billion euros in February, continuing to decrease for the sixth month in a row.
The Greek central bank data showed that credit extended to the private sector shrank at an annual 2.5 percent pace in March, unchanged from the previous month.
In parallel to the deposit outflows, Greek banks have been stepping up their use of emergency funding provided by the country’s central bank.
The cap on that emergency liquidity assistance (ELA) has been progressively raised by the ECB, which effectively cut off access to its own funding window for Greek banks in February.
The ceiling was raised to 76.9 billion euros on Wednesday, leaving an unused liquidity buffer of about 3.0 billion, a banking source told Reuters in Athens. [Reuters]