Cyprus’ cash reserves declined in December to 3.84 billion euros (4.65 billion U.S. dollars) from 5 billion euros in the previous month due to increased handouts to business and workers as well as the repayment of debt, Minister of Finance Constantinos Petrides said on Tuesday.
Petrides said that the current reserves amount to about 20 percent of the eastern Mediterranean island’s current GDP.
Petrides added that the government will start reducing the country’s 25.9-billion-euro public debt when the pandemic begins to recede.
The government opted to increase the public debt by tapping the markets in 2020, in a bid to increase its reserves so as to provide support packages to boost the economy following two lockdowns aimed at curbing COVID-19 infections.
“Our strategic target since the beginning (of the pandemic) was to roughly double our reserves without jeopardizing rating downgrades or the sustainability of the public finances,” Petrides told the state-run Cyprus News Agency. (1 euro = 1.21 U.S. dollars)