NICOSIA, July 16 (Xinhua) -- Cyprus expects a positive report from a group of troika technocrats, which will open the way for more bailout money from international lenders, Finance Minister Haris Georgiades said on Tuesday.
Georgiades said that the troika technocrats representing the European Commission, the European Central Bank and the International Monetary Fund will start work on Wednesday taking stock of progress in the implementation of a bailout memorandum by Cypriot authorities.
"I am sure that Cyprus will successfully pass its first evaluation test of its economic adjustment program," Georgiades told a press conference ahead of meeting the troika technocrats.
He added that the government had worked intensively over the past three months to implement the provisions of the bailout memorandum and is fully committed to materializing an extensive modernizing program agreed with international lenders.
Cyprus clinched a 10-billion-euro (13-billion-U.S. dollar) bailout agreement on March 25 but it was forced to seize up to 60 percent of uninsured deposits of over 100,000 euros to recapitalize its largest lender, Bank of Cyprus.
It was also forced to accept the winding-down of Cyprus Popular Bank, its second largest lender, which had drawn 9.2 billion euros in European Central Bank emergency liquidity assistance in the past 12 months.
These measures have effectively demolished Cyprus' once thriving banking system and turned off the taps on liquidity for the economy and the government is relying on bailout money to finance its operations.
A first trance of about 3 billion euros was released soon after the finalization of the bailout agreement in April.
The troika group is expected to make an assessment of the state of Bank of Cyprus which is currently being administered by a provisional board under the direction of the Central Bank of Cyprus acting as a resolution authority.
Georgiades said he hoped the troika report expected by the end of July will help lead Bank of Cyprus out of its resolution status so as to be able to provide liquidity for the restart of the economy.
Georgiades also said that a sale of gold reserves is only one of existing options for raising money by Cyprus to repay its debt, adding that it is not under consideration at the moment.
"The possibility of selling gold is known, but only as an option," he said without elaborating on what other alternatives could be.
Considering the option of selling "excessive" gold reserves to raise 400 million euros is a stipulation in the bailout memorandum.
However, Georgiades said selling gold reserves comes under the exclusive jurisdiction of the Central Bank of Cyprus.
"This eventuality will be considered along with other options when the time comes," Georgiades added.
Cyprus owns just under 14 tons of gold.
News of gold selling by Cyprus in April had caused a sharp fall in gold prices on account of fears that it could set a precedent as the haircut of deposits has created a precedent in the Eurogroup for saving failing banks.
Cypriot President Nicos Anastasiades also said last week that he hoped there would be no need for the eastern Mediterranean island to sell any of its gold reserves.
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