Greek bank deposits drop slightly in Jan., pause 4-month rise

ATHENS Wed Feb 27, 2013 7:18am EST

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ATHENS Feb 27 (Reuters) - Greek business and household bank deposits dropped slightly in January, pausing a four-month increase, central bank data showed on Wednesday.

Reduced uncertainty over the country's future in the euro zone led to deposit inflows in the last months of 2012 with December registering the biggest monthly inflow in four years, helping to ease Greek banks' liquidity strains.

Bank of Greece data showed deposits fell 0.3 percent to 160.97 billion euros at the end of January from 161.45 billion in December.

Banks lost about a third of their deposits after the country's debt crisis erupted in late 2009, partly due to capital flight on fears of a euro zone exit.

The shrinking deposit base added to strains on Greek lenders, which lost access to international funding markets and have come to depend on central bank funding for their liquidity.

Since hitting a bottom in June 2012, 10.4 billion euros have returned to the banking system.

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