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Cyprus imposes drastic capital controls as banks reopen
Cyprus has implemented a series of stringent capital controls as it seeks to prevent assets fleeing the country when its banks reopen today.
With Cypriot banks set to open their doors for the first time in two weeks following Sunday’s last-minute €10bn bailout deal, the country has moved to head off the risk of a run on the banks.
Limits have been placed on credit card transactions, bank account withdrawals, cheque cashing and money transfers, according to the Financial Times.
Depositors will be unable to withdraw more than €300 in cash, while overseas credit card transactions will be limited to €5,000 per month and citizens will be banned from taking more than €3,000 in cash out of the country per trip, the paper reports.
The controls are due to remain in place for the next week, and EU regulations state such impositions can only apply for a maximum of two weeks, but sources told the FT the government would renew the curbs for “as long as necessary”.
Cyprus’ €10bn bailout, agreed in the early hours of Monday morning, will see significant haircuts on deposits of €100,000 at either of the country’s two biggest banks – Laiki and Bank of Cyprus.
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