Euro Rate: How to Fund Greek Banks?

Forex news, euro rate. Following the decline of the country’s credit rating, the Bank of Greece has decided to partake in smoothing the funding of Greek financial institutions. European Central Bank (ECB) has claimed that Greek financial institutions may be funded by the scheme of urgent liquidity support, as informed by Reuters.

Standard&Poors (S&P) rating agency has lowered the rating of Greece to “partial default”.

The program foresees providing Greek banks with 35 billion euro (47 billion dollars) from European Financial Stability Facility. However, before the implementation of the scheme ECB has stated that national central banks are to be included into the list of Greek financial institutions, which are to be supported according to the scheme of urgent liquidity support.

The reason for this is the fact that ECB Board of Governors has implemented a temporary ban on using Greek bonds as guarantees of transactions. Contractors’ needs may be resolved by central banks, according to the agreement on liquidity support.

Central Bank has announced that debt instruments, released or guaranteed by Greece, may be used as a guarantee of transactions after the adoption of Athens’ rescue program. Investors are rather puzzled by the fact that Finance Ministers of euro zone and ECB have not introduced the scheme of work jointly with European Financial Stability Facility.

The problem is extremely serious, as Greek banks are at the point of bankruptcy. Moreover, it arises on the eve of implementing a new set of liquidity, which will result in providing new 3-year credits.

According to the analysts of the Department of Derivatives Trading within Masterforex-V Trading Academy, at the beginning of European trading session euro future is traded below the point of resistance 1.3500. There was no demand above 1.3480 on February 24 and 27. Support is provided by point 1.3450, which may be the start of buying if there is interest to this (growing size and growing price). Euro rate may move to 1.3400 point if it is passed and set below 1.3450.