Abu Dhabi:

The UAE banks, particularly Dubai’s, may benefit if there’s a flight of Russian capital from Cyprus’ banks, local market analysts told Gulf News yesterday.

As matters stand, the Mediterranean nation has rejected an unprecedented one-time levy on bank deposits, throwing into limbo a rescue package designed to keep it in the euro.

Russian companies and individuals have about $31 billion of deposits in Cyprus.

“If the Russian deposits begin to leave Cyprus, they may choose to move out their money to a non-European destination like Dubai, where the Russian presence is already quite significant,” said Anastasios Dalgiannakis, Head of Trading at Mubasher Financial Services.

Haissam Arabi, an independent financial expert said if not contained, the Cypriot banking crisis could have major repercussions for the global equity markets, and in that event, the UAE markets cannot remain insulated from the after-shocks.

“If the Cyprus crisis scares off global equity markets, there’s bound to be a correction on the Arab markets, which have been up since the beginning of the year,” said Arabi.