The drop in foreign currency inflows from shipping, which started in July following the introduction of capital controls in late June, has picked up again, with the reduction in September coming to 53 percent, on the back of a 46 percent decline in August and 60 percent in July, according to Bank of Greece figures.
When one considers that the lion’s share of foreign currency in the sector comes from oceangoing shipping, it becomes clear that the capital controls have had a sinking effect on the foreign account balance and the cash flow of banks. In the first half of the year the inflow has posted an annual increase.
The foreign currency inflow from shipping dropped to 598.2 million euros in September against 1.274 billion euros in the same month last year. In August it had amounted to 570.7 million (from 1.069 billion in August 2014) and in July it had come to 470.7 million from 1.172 billion euros in July 2014. This means that the inflow declined by a total of 1.7 billion euros in the third quarter of the year.
The decline is even greater considering that the exchange rate of the euro has fallen significantly from last year and the above amounts given in euros concern dollar payments.
The decline is mainly attributed to the capital controls and the fact that a notable number of shipping firms, often under pressure from foreign shareholders, were forced to redirect their revenues from chartering and ship transactions to other countries so that they could meet their international obligations.
Another factor is the fall in global dry-bulk market rates, which have reached historic lows. As most of the Greek-owned fleet comprises dry-bulk carriers – and not tankers whose rates are showing very good yields – it is estimated that the current, last quarter of the year will see a further decline in the foreign currency inflows from shipping.