ECONOMY

In Brief

Bank deposits in crisis-hit eurozone countries stable FRANKFURT (Reuters) – Deposits in commercial banks in the countries hit hardest by the eurozone debt crisis held at relatively stable levels in June, indicating savers have not lost confidence in the countries’ banking sectors, data showed yesterday. Deposits at Greek banks fell slightly to 372.8 billion euros in June from 379.7 billion euros in May, data released by the European Central Bank (ECB) indicated. Bank deposits in Portugal, Spain and Ireland were on an upward trend, with both Spain and Portugal seeing new record-high levels. Large monthly fluctuations are common in the figures, which are for all currencies combined and euro-area counterparts. The data is not seasonally adjusted. However, the ECB figures show a slightly different picture from the national central bank data. For example, Bank of Greece data have shown a fall in deposits for five consecutive months up to May. Numbers released by the Greek central bank cover household and business deposits but exclude bank-to-bank lending, officials say. The bank has not yet published June figures. Deutsche discloses higher exposure to Greece, Spain FRANKFURT (Reuters) – Deutsche Bank said yesterday it had net exposure of 1.1 billion euros to Greece, 8.1 billion euros to Italy and 1 billion euros to Spain at the end of March, more than double the figures it had previously given. Germany’s largest lender explained that yesterday’s numbers were higher because they were calculated using the methods set out by European regulators for pan-European stress tests, rather than the lender’s own, less comprehensive risk model. Earlier this year, Deutsche had said it had 500 million euros’ exposure to Greece at end-March, 3.2 billion euros’ exposure to Italy, and no overall sovereign exposure to Spain or Portugal, after accounting for hedging. Deutsche said its exposure to Greece, based on the European regulator’s method, had declined to 500 million euros by the end of June, from the end-March level of 1.1 billion. Deutsche Bank published details on its sovereign exposure as part of its second-quarter earnings yesterday. It turned a net profit of 1.2 billion euros. Cyprus sentiment Economic sentiment in Cyprus rose in July as demand in the services sector improved and consumer confidence picked up, a survey showed yesterday. The economic sentiment indicator (ESI) rose 8.9 points to 71 units in July. Respondents in the services sector reported an improvement in demand and in their financial affairs over the past three months. More businesses also expected an increase in sales over the next three months, the survey compiled by the University of Cyprus said. Cyprus’s economy returned to growth in the first quarter of the year after recording five quarters of contraction. Data for the second quarter are due for release by the statistics department on August 13. (Reuters) Turkish rates Turkey’s central bank yesterday slashed its forecast for inflation this year, as expected, and said it would wait until 2011 before making «limited» rises in interest rates. The central bank had previously said rates would stay low for a long time. The bank cut its 2010 mid-point inflation forecast to 7.5 percent from 8.4 percent and lowered its forecast for 2011 inflation to 5.3 percent from 5.4 percent, Governor Durmus Yilmaz told a news conference on its quarterly inflation report. The 2012 inflation forecast was unchanged at 5 percent. Yilmaz said that even if the bank does raise rates moderately in 2011, policy rates could stay in the single digits for the foreseeable future as long as Turkey’s fiscal discipline improves. «Our revised forecast indicates that the monetary tightening required to keep inflation in line with medium-term targets would start later and would be more limited compared to the previous forecast,» the governor said. (Reuters)