Cyprus Meets The Terms Of Its Next Bailout Installment
The euro traded steadily near $1.37 on Tuesday morning as the Christmas holidays approached.
The common currency has been buoyed by an agreement between the region's finance ministers about how to wind down eurozone banks once the European Central Bank takes over as head banking supervisor.
The bloc's banking union plans have been making progress, but many have criticized the region's most recent decision to appoint a single resolution board to decide whether a bank should be closed or broken up. Many say the deal, agreed upon by the bloc's finance ministers, leaves the eurozone vulnerable to the individual interests of national governments; exactly the issue the banking union is being created to avoid.
However, the deal itself was a huge step forward for the common currency as it shows the world that the banking union is a serious endeavor and that the region is making forward progress on putting plans into place for next year.
The euro also found support from news that the International Monetary Fund released Cyprus' next round of bailout cash on Friday. Reuters reported that the tiny island nation was approved to receive another $114 million on Friday. In order to have access to the funds, Cyprus was required to meet a strict set of conditions and will be expected to follow through on the reforms for the next three years in order to access all of the aid promised.
IMF Managing Director Christine Lagarde praised Cyprus for its hard work in maintaining its reform process, but said the government would need to speed up its privatization programs in order to stay on track. Lagarde said the implementation of all of the recommended reforms is necessary in order to move forward with renewed confidence and stable growth.
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