Forex Flash: Cyprus will face a deep and prolonged adjustment process – BBH

FXstreet.com (Barcelona) - Yesterday Cyprus reached an agreement with the troika that allowed the country to save its financial system but in the long term is going to face a deep and prolonged adjustment process, according to Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman.

The financial sector plays an important role in its economy that does not have a capacity “to exports its way to growth,” the analyst notes. Marc points out that the problem in Cyprus is not an expensive currency but its developmental model. “The bottom line is the downside risks to the economy mean that this aid package may not be the last for Cyprus,” says Mr Chandler.