Euro Spikes On Report That A Cypriot Bank To Be Sold To Russian Investors
Via Bloomberg, there is a report in Kathimerini that Cypriot bank Cyprus Popular will be sold to Russian investors.
According to Kathimerini, the deal would reduce the country's financing needs by 4 billion euros.
The euro is rising on the news.
Société Générale strategist Kit Juckes had this to say in an email:
Stop press, first Russia offer is to buy Cyprus Popular bank, according to gossip. Would Putin offer a loan to Cyprus in exchange for a share of future gas revenues? I would, if I were in his shoes. The US would mind that less than the notion of Putin asking for a naval base, and the EU would prefer a loan to a Russian purchase of a Cypriot bank. Not that any of this means this is what will happen – geopolitics means that we now wait and see how the EU responds, while Cypriot banks stay shut and Cypriot depositors dare to hope they will end up keeping more of their cash. Time though, is short...
The chart below shows the spike in the euro against the U.S. dollar on the report.
However, according to Reuters, the Cypriot government is denying the deal.
Now, it's starting to give up its gains.
