NICOSIA, Sept. 26 (Xinhua) -- Cyprus's international lenders have started their first post-bailout evaluation of the eastern Mediterranean island's economy, the Central Bank of Cyprus (CBC) announced on Monday.
Cyprus was pulled from the brink of bankruptcy in March 2013 under a 10-billion-euro(11.25 billion U.S. dollars) assistance program - then two thirds of its annual economy - that carried a three year economic adjustment program of harsh austerity and a radical resolution of the banking system.
The representatives of the European Commission, the European Central Bank and the International Monetary Fund, collectively known as the troika, will concentrate on the banking system in their first six-monthly assessment, CBC spokeswoman Aliki Stylianou said in a statement.
"They will meet CBC officials and the management of the three major banks - Bank of Cyprus, Cooperative Central Bank and Hellenic Bank - to be briefed about progress made so far in managing non-performing loans and their capital liquidity situation," she said.
The troika will return every six months, until Cyprus repays 75 percent of the money it received in assistance loans, amounting to 7.6 billion euros.
The island's economy has performed beyond all projections and it did not need to draw 2.4 billion euros of the amount it was entitled to.
"After the evaluation is completed, the delegations will inform the Finance Minister and the governor of the central bank about their conclusion," Stylianou said.
The troika's reports will not carry any mandatory measures for Cypriot authorities to implement, having complied with all of the troika's recommendations except privatizing major public companies, such as the telecommunications and the electricity production and distribution.
But Cypriot authorities are anxious to have a positive report as it will prompt international rating agencies to rate its loan receiving ability to investment grade, meaning that cost of Cyprus's borrowing will go down.
Last week Standard & Poor's upgraded Cyprus ratings to two notches below investment rate and more ratings are awaited by Moody's and Fitch in October and November.
Non-performing loans are the biggest problem the banks have to face, despite managing to bring their ration down by 9.6 percent to 18.44 billion euros at the end of June.
They are also faced with demands for compensation by depositors or investors who had their assets impaired by 47.5 percent in the first ever bail-in - the recapitalization of banks by seizing the money of their customers.
