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Greece to lose access to cheapest ECB cash

Greece to lose access to cheapest ECB cash
FILE PHOTO: Greek national flags and a European Union flag flutter outside a shop in central Athens, Greece July 6, 2017. REUTERS/Alkis Konstantinidis   -   Copyright  Alkis Konstantinidis(Reuters)
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FRANKFURT (Reuters) – The European Central Bank will revoke from Aug. 21 an exemption granted to Greece from its minimum credit rating requirement, it said on Friday, shutting banks’ access to cheap central bank cash because Greek government bonds are rated junk.

Greece will exit its third bailout programme later this month, and the “waiver” from the ECB’s minimum credit rating requirement can only be granted to countries in bailout programmes.

While revoking the waiver could increase funding costs for banks and keep Greece out of the ECB’s 2.6 trillion (£2.33 trillion) euro bond purchase scheme, a ‘clean exit’ from the bailout is still likely to shore up confidence as Greece would finally be standing on its own feet after being propped up for years by international lenders.

(Reporting by Balazs Koranyi; Editing by Hugh Lawson)

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