THE volatility limit at Greece’s stock exchange will be reduced to 20 percent from the current 30 percent when the bourse reopens today following a five-week shutdown caused by capital controls, the exchange said Friday.

    The Athens Stock Exchange (ASE) has been shut since June 29, when the government closed banks and imposed strict limits on withdrawals and foreign transfers to prevent a run on deposits by savers and companies.

    Greece’s stock market is expected to reopen today after a five-week shutdown caused by capital controls, but local investors will face restrictions aimed at stemming capital flight, an exchange spokeswoman said Friday.

    The finance ministry cleared the way for the exchange to resume operations by issuing a decree setting out new trading rules for local investors. There will be no restrictions on foreign investors.

    “After the finance minister signed the relevant decree earlier today, the Athens Stock Exchange board ... decided to reopen the markets of Athens Stock Exchange today, August 3,” the spokeswoman said.

    Traders and exchange officials had hoped the exchange would be able to reopen this week after the European Central Bank gave Greece the green light to allow normal operations by foreign investors, with some limits for local investors.

    Under the ECB-approved plan, local investors will be allowed to buy shares with existing cash holdings but not to withdraw money from their Greek bank accounts to buy shares.

    Some market participants had warned that unlimited trading for domestic investors would have posed a serious risk for lenders by accelerating capital outflows.(SD-Agencies)