The Finance Ministry and the Troika appeared to be converging on an agreement on the haircut of uninsured deposits over 100,000 euros in the Bank of Cyprus at 47.5%.
After marathon negotiations at the Finance Ministry further talks continued at Central Bank until late into the night with Finance Minister Haris Georgiades focussing on the technical issues that had arisen.
“They are very close to an agreement but some technical issues have risen and they are dealing with it,” a source close to the negotiations told The Cyprus Daily.
Under a programme agreed between Cyprus and its international lenders in March, large depositors in BoC were asked to pay for the recapitalisation of the bank.
Authorities initially converted 37.5% of deposits exceeding €100,000 into equity and an additional 22.5% as a buffer in the event of further needs.
The Troika, who are here assessing Cyprus’s loan adjustment programme until the end of the month demanded, a 47.5% haircut on uninsured deposits at BoC while the Finance Ministry was drawing the line at 45%, the sources said.
“The final agreement for the haircut will hover around 47.5% but that remains to be seen as negotiations will continue until late at night and announcements will be made tomorrow (Monday),” they added.