Cyprus rules out devaluation for eurozone entry
Nicosia, Jan 16 - Cyprus President Tassos Papadopoulos has ruled out a devaluation of the strong Cyprus pound for its projected entry into the eurozone on January 1, 2008.
"Definitely not, no way. If anything, the Cyprus pound could be revaluated" upwards, he told foreign correspondents in Nicosia.
ďAll the indicators are against devaluation," said Mr. Papadopoulos, noting that public debt has eased to 64 percent of gross domestic product and the fiscal deficit to 1.5 percent of GDP in 2006.
"None of the (economic) reports even hint at such a possibility," the President also said, adding that "Brussels will have no option" but to keep the Cyprus pound at around its current strength.
The pound on the Mediterranean island, which joined the European Union in May 2004 and is dependent on imports, has been trading at levels of 1.73 euros and 2.24 dollars.
Cyprus Finance Minister Michalis Sarris said in mid-December that the Cypriot economy was on target to adopt the euro as planned and that the Cyprus economy already meets all the preconditions for entry into the eurozone.
GDP is expected to grow by around 3.9 percent in 2007 and inflation to be contained at some 2.5 percent, he said. Another key target is to have a balanced budget by 2010.
The Government has proposed a 4.06 billion Cyprus pound (7.06 billion euros, 9.03 billion dollar) state budget for 2007, with revenue forecast at 3.31 billion pounds.