Cyprus: Eighth Review Under the Extended Arrangement Under the Extended Fund Facility and Request for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Cyprus
IMF Staff Country Reports, September 25, 2015
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- Cyprus: Eighth Review Under the Extended Arrangement Under the Extended Fund Facility and Request for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Cyprus
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Bibliographic details
- Published: September 25, 2015
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513536347.002
Executive summary
- Cyprus continues to recover from the crisis, and program performance remains generally strong.
- Risks to the program remain, although their impact would likely be manageable.
- The domestic political situation remains a challenge to policy implementation.
- Despite the reduced real and financial linkages between Greece and Cyprus, developments in Greece have the potential to affect Cyprus through the confidence channel.
- Based on the continued progress under the program and policy commitments going forward, the IMF staff supports the completion of the eighth review and the proposed modifications of performance criteria (PCs).
Program performance and assessment
- Program performance: generally strong and continuing recovery from the crisis.
- IMF staff recommendation: support completion of the eighth review and the proposed modifications of performance criteria (PCs).
Risks and transmission channels
- Main risk factors:
- Domestic political situation: described as a challenge to policy implementation.
- Spillovers from Greece: even with reduced real and financial linkages, Greek developments can affect Cyprus through the confidence channel.
- Expected impact: risks remain but would likely be manageable.
Policy implications and commitments
- Continued adherence to policy commitments under the program is a condition for staff support to complete the review and modify PCs.
- Emphasis on implementation of reforms and maintaining program momentum.
Thematic coverage (subjects and keywords)
- Subjects: Asset and liability management, Banking, Credit, Debt restructuring, Financial institutions, Loans, Money, Nonperforming loans, Public debt.
- Keywords: CR, Credit, Debt restructuring, disbursement of SDR, foreclosure regime, Global, government, IMF Deputy managing director, ISCR, Loans, Nonperforming loans, reform effort, reform momentum.