Outgoing Cypriot central bank governor Athanasios Orphanides warned the government on Wednesday of deterioration of the country's economic situation unless it acts promptly.

In presenting his last six-monthly report on his last day in office, Orphanides blamed the government for acting too late in the face of repeated downgrading of the economy by international rating agencies that have shut Cyprus out of international bond markets.

"It was after a government reshuffle in August 2011 and only at the end of the year that the government changed its economic policy and implemented substantial consolidations measures," Orphanides said in his report.

However, the measures did not go far enough to restore market confidence for Cyprus to re-enter the international bond market, he added.

Last week, Cypriot president Demetris Christofias replaced Orphanides at the end of his five-year term for failing to closely monitoring the banking system.

"The outgoing central bank governor is shouldering unbearable responsibilities because of his negligence which left banks exposed to the Greek debt," Christofias said in a speech earlier.

Orphanides dismissed the accusation, saying he had no legal powers to prevent the banks buying Greek debt.

Cyprus' three major banks are estimated to see a loss of 5 billion euros because of a 75 percent write-down of the Greek bonds.

One of the banks with the most severe exposure to the Greek debt has a deadline until the middle of this year to raise more than 1 billion euros in recapitalization money.

Orphanides said he was confident the banks could cope themselves if they continued cooperating with the central bank and the Ministry of Finance.

His successor, finance economics professor Panicos Demetriadis, who would take his post on Thursday, would be confronted with the mounting task of overseeing the bank recapitalization program, in the face of empty government coffers.