Fitch: Greece Needs More Confidence Before Lifting Capital Controls

(RTTNews) - Further improvements in investor and customer confidence are needed for Greek authorities to lift bank capital controls, introduced in June 2015 when the "Grexit" crisis played out, Fitch Ratings said Wednesday.

"In our view, the economic and political environment remains fragile and confidence has not yet returned to the financial system," the rating agency said in a statement.

"Capital controls could be gradually relaxed from late 2016 if the political and operating environments are stable and Greece continues to deliver the reforms envisaged in its economic adjustment programme."

During the "Grexit" crisis, the banking sector lost EUR 43 billion, or 26 percent, of private sector deposits, which have not flowed back into the system, Fitch said, adding that deposit levels remain broadly flat since June 2015.

Fitch forecast another year of economic contraction for Greece this year, with GDP contracting by 0.9 percent, with gradual improvement coming in 2017.