Forex Flash: Thursday reopening now appears tenuous in Cyprus – UBS

FXstreet.com (Barcelona) - The Cypriot parliament voted against a proposal to seize deposits from accounts held in Cypriot banks. Not even a single lawmaker in the 56-seat parliament voted in favor of the plan. The party of President Anastasiades abstained en masse even though he negotiated the bailout plan on Friday night. In fact the bill which was finally submitted to parliament included an amendment which would make deposits of less than €20k exempt, but even this gesture was not enough to secure parliamentary approval.

The ECB quickly issued a statement saying it took note of the outcome, and that "The ECB reaffirms its commitment to provide liquidity as needed within the existing rules". Cypriot banks remain closed, although cash machines appear to be operating as normal. According to Research Analyst Gareth Berry at UBS, “Although the official timeline indicates that banks are due to re-open on Thursday, this now seems unlikely given the absence of a 'plan B' following the parliament's overnight rejection.”