ECONOMY

ELA for banks is reduced as cash supply increases

ela-for-banks-is-reduced-as-cash-supply-increases

The European Central Bank decided on Thursday to lower the ceiling of the emergency liquidity assistance (ELA) available to Greek banks by 600 million euros, on the grounds that the country’s economy had stabilized after the bailout agreement was signed.

Sources say that the maximum amount available to the Greek credit system has come down to 89.1 billion euros from 89.7 billion as set on August 18.

The same sources said that after the signing of the bailout deal the liquidity cushion grew by some 800 million euros to revert to the safety level of 3 billion euros.

The improvement in liquidity conditions is mainly thanks to the inflow of cash from tourism, as well as from salary deposits and bill payments. As a result, a decision was reached to return 600 million euros of the ELA cash, bringing down the cost of the banks’ funding.