The decision to further push back the re-opening of Cypriot banks, which have been shut since March 16, even as the country hammered out a last-minute bailout deal, may be seen as a signal of further uncertainty in the crisis-hit island nation. But analysts tell CNBC that on the contrary, the move will help restore investor confidence.
The extension of the banks closure to Thursday, to prevent a run on deposits, shows that the authorities are working hard to put in place measures to stabilize the battered banking system, said experts.
"People who have got money with these banks will want them to re-open, but it's much more important in terms of global financial stability for it to be done the right way," said Steve Brice, chief investment strategist at Standard Chartered Bank in Singapore.
The postponement comes on the heels of a 10 billion euro ($13 billion) bailout for the Cypriot banking sector in lieu of heavy losses for large depositors. Even when the banks re-open, they are expected to be subject to capital controls.
(Read More: All Cyprus Banks to Remain Closed Until Thursday)
Brice added that government bond yields in peripheral euro zone states like Spain and Italy had not risen sharply, which was a sign that investors viewed any fallout from Cyprus as contained.
"Markets were down a bit yesterday [Monday], but bonds in the peripheral euro zone were not up that significantly and I think ultimately this [keeping the banks closed] will be seen as a positive," Brice said. "But we do need to get through the next few days."
The decision to close Cypriot banks 11 days ago, after the terms of an initial bailout agreement included a levy on small and large deposits, caused ripples within and outside Cyprus.