May 15, 2017 / 5:58 PM / 3 months ago

Greece outlines roadmap for gradual lift of capital controls

Greek soldiers are silhouetted during a ceremony to bring down the national flag atop the Acropolis hill during sunset in Athens, Greece, April 11, 2017.Alkis Konstantinidis

ATHENS (Reuters) - Greece outlined a roadmap on Monday for the gradual lifting of capital controls it imposed in July 2015 to safeguard its banks but said the plan is contingent on several factors, including restored access to money markets.

"The next steps towards a further loosening of capital restrictions must be implemented as soon as possible," the finance ministry said. "However, the steps must be designed and implemented in the context of a careful strategy, dependent on conditions, to safeguard financial stability."

Since their imposition in the summer of 2015, when the leftist-led government clashed with official lenders in a push against austerity and nearly crashed Greece out of the euro zone, capital controls have been gradually loosened.

Depositors can withdraw up to 840 euros in cash every two weeks, but face no limit on money they have deposited in banks after July last year.

Money that has come to Greece from overseas can be transferred abroad with no restrictions, otherwise the monthly limit for money transfers abroad stands at 1,000 euros currently.

The finance ministry said the factors needed for the remaining restrictions to be lifted include a further improvement in economic conditions.

Authorities will also need to see growing confidence among depositors, reflected by an increase in private sector bank deposits, and continued progress with the country's economic adjustment program.

Access to financial markets for both the government and the country's banks will have to be restored, it said, without providing a specific timetable.

More than a year after the country clinched a third bailout to stay in the euro zone, Greek banks have seen only small deposit inflows and remain dependent on central bank borrowing to plug their funding gaps.

While business and household deposits rose to 119.31 billion euros ($130.5 billion) in March from 119.07 billion in February, they stand at their lowest level since November 2001.

Reporting by George Georgiopoulos; Editing by Catherine Evans

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