Cyprus Bailout

I was interested to find out why is this Cyprus country gaining so much highlights from the traders worldwide. So, I did some research on the current economic issues from this 9,251 sqkm country which is one of the European Union member.

The present economic situation is that a deal is arranged for 10 Billion EUR  bailout from European Union to  Cyprus for not getting into bankrupt. As a return Cyprus need to sacrifice its banking sector to settle debts.  According to the deal, deposits above 100,000 EUR will be frozen and used to settle debts.  Deposits below 100,000 EUR are insured and being transfered to Bank of Cyprus.

The reactions from the Cypriots now is to withdraw as many money from the ATMs. They fear of loosing money to the banks.  The biggest concern is from the Russians companies or individuals because they are the largest customer of Cyprus banks.  The banks responded by reducing daily withdrawal limit from 260 EUR to 100 EUR.  Banks were closed and would only open on this Thursday.

As for me, I would see the market reactions after the Cyprus banks open on this Thursday.  Maybe a sell off for the euro will happen.

The link from www.businessinsider.com on trucks carry cash for Cyprus banks would aid for your trading mind.