ECONOMY

In Brief

Rise in non-euro deposits for Greek banks on Cyprus Greek banks operating in Cyprus increased their foreign-currency deposits by 18 percent in May over the previous month to 2.5 billion euros ($3.1 billion) as the debt crisis in Greece deepened. The jump in non-euro deposits at branches of Greek lenders on the eastern Mediterranean island was more than twice the 7.1 percent increase for the entire Cypriot banking system, which saw deposits rise to 18.8 billion euros from April, according to data from the Central Bank of Cyprus obtained by Bloomberg. Eurobank EFG Cyprus Ltd, a unit of Greece’s second-biggest lender, posted the biggest monthly increase with a gain of 44 percent to 814.3 million euros, while deposits at National Bank of Greece (Cyprus) Ltd rose 11 percent to 486.7 million euros. Deposits at Greek banks in Cyprus have been rising as Greece’s debt crisis fuels investor concern that the country will default or have to restructure its borrowing. (Bloomberg) Cypriot airline warns of H1 loss due to tough climate NICOSIA (Reuters) – Cyprus Airways yesterday warned it would post a first-half loss due to a tough economic climate, competition and the effects of the volcanic ash cloud, which disrupted global air travel in the spring. The airline, majority-controlled by the state, said an increase in fuel prices was also a factor. «Its financial results for the first six monthly period of 2010 are expected to be significantly more loss-making compared to those of the comparative period of 2009,» the airline said in a statement to the Cyprus Stock Exchange. The carrier said its poor performance so far this year was mainly due to the fallout from the global economic crisis and the intense competition in the industry, which has driven passenger numbers and fare yields down, significantly hampering its profits. Auditor expands RSM Stylianou, an auditing and accounting firm, plans to open a new office in Bulgaria as part of its expansion plans. The Athens-based company said in a statement yesterday that the new Bulgarian office will open in the immediate future, without providing further information. Recently, RSM Stylianou expanded into Nicosia, Cyprus, and Tirana, Albania, in a move that will help it to provide more benefits to its multinational clients, it added. Bosporus Strait Turkey said it has broad support from 20 oil companies for steps that would make use of the Bosporus Strait for oil traffic more expensive than pipelines. Turkey is proposing higher insurance fees, limits on tanker size and improved safety standards until alternative routes are ready in three or four years. There were «no objections» from participants, including Exxon Mobil Corp, Chevron Corp, OAO Rosneft and BP Plc at a meeting yesterday in Istanbul, Energy Minister Taner Yildiz said. Turkey is using the environment damage caused by BP’s Gulf of Mexico spill to press its case that oil traffic through the straits is unsafe and potentially dangerous. (Bloomberg) Spanish rating The cost of insuring Spanish government debt against default rose yesterday after ratings agency Moody’s placed the country’s Aaa rating on review for downgrade. Five-year credit default swaps on Spanish government debt rose to 270 basis points, up by 10 bps, according to Markit. This means it costs 270,000 euros to protect 10 million euros of exposure to Spanish bonds. Moody’s Investors Service said late on Wednesday that it may cut Spain’s triple-A local and foreign currency government bond ratings after a three-month review. Ratings agency Fitch cut Spain’s triple-A credit rating to AA-plus in late May. (Reuters) Inflation rises Cyprus’s consumer price inflation rose to 1.9 percent year-on-year in June, from a May reading of 1.6 percent, mainly due to an increase in the price of fuel, electricity bills and air fares. The island’s statistics service said yesterday that month on month, the CPI index increased by 0.20 percent to 112.89 points compared to 112.67 points in May. (Reuters)