• Cyprus deposit tax shakes markets


    Cyprus deposit tax shakes markets
    The euro has dived with traders forced to fix sharp losses after the Cyprus government’s controversial decision to impose a one-time levy on depositors triggered a major turmoil in the eurozone.
    On Monday, the euro slid as low as $1.2888 in early trade, its lowest point since December. Gold, which is seen as a safe haven in troubled times, rose above $1,600 for the first time in more than two weeks.

    In the debt markets, the yield on Spain's 10-year government bond – effectively the interest rate – jumped 17 basis points to 5.098%. Yields on 10-year Italian debt rose 13bp to 4.736%.

    The Shanghai Composite lost around 1.02% and the Nikkei dropped 2.1% in the morning. The Moscow stock exchange followed the world-wide down trend and lost 2.3% at the opening on Monday.

    UK’s FTSE100, German DAX and French CAC40 indexes all opened in the red and at the time of writing are losing around 1 %.

    The reaction followed Eurozone finance ministers demanded Cypriots pay up to 10% of their bank deposits in exchange for a $13bn bailout. People rushed to cash machines to withdraw their savings in panic. Experts believe that could trigger runs on banks in other eurozone countries.

© All Rights Reserved for Asharqia Chamber