National Bank of Greece: New Currency Fear?

National Bank of Greece: New Currency Fear?

 So far Greece has failed to sign a bailout deal with its international creditors, pushing experts to weigh the options of a looming Grexit. If Greece leaves the eurozone and choose to operate its own currency, it could cause a “havoc” in its economy, as per CNBC which quoted William Buiter global chief economist at Citigroup.

Earlier this month the governor of Luxmbourg’s central bank and member of the European Central Banks executive board, Merch warned that without a deal Greece would have to resort to “exceptional tools”. Mr Merch said: “ There are intermediate solutions circulating, such as the issuance of a parallel currency or IOU…But all of them have a high cost.”

Mr. Buiter cautioned that the Greek economy was considerably weak at present to endure a Grexit and that transitionary into an independent currency would not de an easy task. Moreover he clarified, “Greece has not historically been good at managing an independent currency.” Interstingly Mr. Buiter was also one of the first expert to have the “Grexit” terminology for Greece’s ongoing crises.

Elsewhere, bailout talks are progressing at a considerably slow pace, with European officials demanding more “intensive work” on economic reforms. Failure to reach a compromise could throw Greece into default mode as it faces hefty debt payments over the summer.

Separately, National Bank of Greece stock stayed in the red this past week with overall decline of approximately 3 percent. Yesterday the stock fell by more then 3 percent and finished off in the red at $1.36 and with a market cap of $4.90 billon. National Bank of Greece stock stayed within the $1.35-$1,41 range yesterday with a trading volume more than 37% lower than the stocks 30-day average benchmark.