Cyprus credit controls keeps cash in the country

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Cyprus credit controls keeps cash in the country

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Cyprus is reportedly to limit the amount of cash individuals can take out of the country to 3,000 euros as details of the country’s capital controls emerge.

According to the Greek newspaper Kathimerini, the cashing of cheques will be suspended and the use of credit cards abroad limited to 5,000 euros per month.

Businesses that need to transfer funds overseas to pay for imports will be allowed, but only if they fulfill strict government requirements.

All saving accounts must run until their expiry date with no early withdrawals allowed.

The capital control measures are to be in place for seven days.

Responding to the newspaper report, the Cypriot central bank and finance ministry said the article was based on a draft proposal and a final version has yet to be adopted.

Cypriot banks are due to re-open on Thursday.

The Cyprus bank bailout

  • The bailout will mean a significant restructuring of Cyprus’ banking sector

  • The country’s second largest bank, Laiki bank, will be split into two parts, a “bad bank” and “good bank”, before being closed, incurring thousands of job losses

  • Deposits in Laiki bank of less than 100,000 euros (effectively the “good bank”) are insured by EU law and will be transferred to the country’s biggest bank, Bank of Cyprus

  • Deposits in Laiki bank of more than 100,000 euros are not insured by EU law and will be put into the “bad bank”

  • Deposits in this “bad bank” and deposits of more than 100,000 euros in Bank of Cyprus will be frozen and used to pay Laiki’s debts and recapitalize Bank of Cyprus. These uninsured depositors will have to face forced losses of up to 40% on their deposits