More businesses in Cyprus, including small and medium-sized enterprises (SMEs), will benefit from export and import opportunities available through a trade finance limit increase provided by the TFP to Bank of Cyprus.
The limit will double from €50 million to €100 million and is in response to the coronavirus pandemic.
The increase in trade finance will help mitigate the disruptions that severe market conditions have caused in trade and supply chains. It will accommodate the growing demand from Bank of Cyprus’s customers for trade finance instruments by providing guarantees for the import, export and local distribution of imported goods.
The importance of trade has grown immensely since the outbreak of the coronavirus pandemic as it helps firms to better manage commodity stocks and plan for longer trade cycles.
This is recognised by the EBRD, which made the support of trade operations one of its key crisis response priorities.
The Bank now expects to dedicate the entirety of its business investments of up to €21 billion in 2020-21 to address the economic impact of the crisis and contribute to the recovery of the 38 economies where it invests.
Bank of Cyprus is the largest bank in the country, providing a wide range of products and services that focus on the Cypriot market, which accounts for 99 per cent of its operations. It is also one of the EBRD’s most active TFP partner banks in Cyprus with 319 transactions worth over €200 million to date.
Andreea Moraru, EBRD Director, Regional Head of Greece and Cyprus, said: “I am very glad we are stepping up our support for trade in Cyprus by increasing our TFP limit to Bank of Cyprus, one of our long-standing partners. This is a crucial step to help local importers and exporters respond to the impact of the pandemic. Trade finance is a vital part of the EBRD’s coronavirus response.”
Lakis Pantelides, Manager, Trade Services Department, Bank of Cyprus, said: “We would like to thank the EBRD for the assistance and support provided over the years and especially for this increase in our trade limits during these difficult times caused by the pandemic. This allows us to continue to provide assistance and support to our corporates and SMEs.”
The existing TFP facility has helped Bank of Cyprus to restart its trade finance business at a time when commercial bank limits have been suspended or limited as a result of the economic crisis. With the help of the TFP, Bank of Cyprus has been able to re-establish its correspondent banking relationships and thereby facilitate international trade transactions for its clients, the vast majority of them SMEs.
Since its inception, the TFP has supported 648 import-export transactions for a total of €327 million in Cyprus.
I am very glad we are stepping up our support for trade in Cyprus by increasing our TFP limit to Bank of Cyprus, one of our long-standing partners. This is a crucial step to help local importers and exporters respond to the impact of the pandemic. Trade finance is a vital part of the EBRD’s coronavirus response.