July 20, 2017 / 12:18 PM / a year ago

ECB lowers emergency funding cap for Greek banks to 40.5 billion euros

ATHENS (Reuters) - The European Central Bank lowered the cap on emergency liquidity assistance (ELA) Greek banks draw from the domestic central bank by 1.1 billion euros to 40.5 billion euros ($46.5 billion), the Bank of Greece said on Thursday.

An one Euro (L) and one Greek Drachma coins are displayed on an European flag in this picture illustration taken in Istanbul June 14, 2012. REUTERS/Murad Sezer

The move reflected improved liquidity conditions, taking into account private sector deposit flows, it said. The ELA ceiling is valid up to August 2.

Greek banks have relied on emergency liquidity assistance (ELA) since February 2015 after being cut off from the ECB’s funding window. Emergency funding is more costly than borrowing directly from the ECB.

In June last year the ECB reinstated Greek banks’ access to its cheap funding operations, allowing lenders to reduce their dependence on the emergency liquidity lifeline.

ELA funding to Greek lenders dropped by 2.8 billion euros, or 6.9 percent, to 37.9 billion euros in June compared to the previous month.

Reporting by George Georgiopoulos

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