Cyprus experienced a substantial improvement in its current account deficit during the second quarter of the year, which narrowed to €346.1 million from €1.04 billion in the same period last year, according to preliminary data released by the Central Bank of Cyprus (CBC).

The deficit showed a remarkable 67 per cent improvement compared to the previous year. Specifically, the goods deficit stood at €1.61 billion in the second quarter of 2023, down from €1.93 billion in the corresponding period of the previous year, indicating a 16.3 per cent annual improvement.

In the services sector, the balance was positive, amounting to €1.90 billion, compared to €1.55 billion in the same period last year, marking an annual improvement of 22.6 per cent.

After adjusting for the impact of Special Purpose Entities (SPEs), treating SPEs as non-residents, the deficit was recorded at €480.7 million in the second quarter of 2023, compared to a deficit of €727.2 million in the same quarter of the previous year, as reported by the CBC.

Furthermore, Cyprus’s International Investment Position (IIP) deteriorated in the second quarter of 2023, presenting a net liability position of €28.65 billion, compared to €28.26 billion in the first quarter of the same year.

Following the adjustment of data regarding the impact of SPEs, the IIP recorded a net liability position of €10.71 billion in the second quarter of 2023, compared to €10.21 billion in the first quarter of 2023.

Additionally, Cyprus’s gross external debt marginally decreased to €169.614 billion in the second quarter of 2023, from €169.618 billion in the first quarter of the same year.

On the other hand, external assets in debt instruments increased to €146.83 billion from €145.61 billion in the first quarter of 2023.

Consequently, the net external debt decreased by €1.22 billion to €22.78 billion in the second quarter of 2023.

Adjusted for the impact of SPEs, the gross external debt amounted to €58.51 billion in the second quarter of 2023, compared to €58.15 billion in the first quarter of 2023.

The corresponding index for net external debt decreased to minus €12,82 billion in the second quarter of 2023, from minus €11.56 billion in the first quarter of 2023.

The Central Bank of Cyprus (CBC) has raised the capital buffer requirement for Other Systemically Important Institutions (O-SII) that must be maintained by Cyprus’s major banks, including the Bank of Cyprus and the Hellenic Bank, following a reevaluation of the determination of systemic credit institutions.

In an official statement, the CBC stated that it has completed its annual review of the classification of credit institutions falling under the O-SII definition for the year 2023.

Specifically, the CBC has identified Bank of Cyprus Public Company Ltd, Hellenic Bank Public Company Ltd, Eurobank Cyprus Ltd, Astrobank Ltd, and Alpha Bank Cyprus Ltd as Other Systemically Important Institutions (O-SII) and has determined the capital buffer requirement that they must maintain due to their systemic importance.

Compared to the previous decision made on December 22, 2022, starting from January 1, 2024, the Bank of Cyprus will be required to increase the O-SII capital buffer to 1.875 per cent from the 1.50 per cent required for 2023, while Hellenic Bank will have to raise it to 1.25 per cent from 1 per cent.

Eurobank will maintain the rate at 0.75 per cent, while both Astrobank and Alpha Bank will continue with a 0.25 per cent O-SII capital buffer.

Looking ahead to 2025, the Bank of Cyprus will have to further increase the capital buffer to 2.25 per cent, and Hellenic Bank to 1.50 per cent. Other mentioned banks classified as systemic will maintain the same rates through 2025.

These adjustments are aimed at enhancing the resilience of Cyprus’s banking system and ensuring that systemic institutions are adequately capitalised to mitigate risks to financial stability.

The Cyprus Stock Exchange (CSE) ended Wednesday, October 11 with profits.

The general Cyprus Stock Market Index was at 129.19 points at 12:51 during the day, reflecting an increase of 0.56 per cent over the previous day of trading.

The FTSE / CySE 20 Index was at 78.36 points, representing a rise of 0.6 per cent.

The total value of transactions came up to €78,141.

In terms of the sub-indexes, the main, alternative, hotel and investment firm indexes rose by 0.67 per cent, 1 per cent, 1.36 per cent and 3.76 per cent respectively.

The biggest investment interest was attracted by the Bank of Cyprus (-0.68 per cent), Vassiliko Cement Works Public Company (-0.64 per cent), Salamis Tours (+3.24 per cent), Blue Island (-0.57 per cent), and KEO (+3.85 per cent).