Cyprus eased restrictions on capital controls
Friday, including lifting the amount of money that may be transferred
inside and outside the country.
However, individuals would still only be able to withdraw a
maximum of 300 euros daily.
The Finance Ministry said it would now allow domestic transactions
of up to 500,000 euros (651,000 dollars) without prior authorization,
up from 20,000 euros, while businesses may now make domestic payments
or transfers up to 300,000 euros for goods and services. Anything
above that amount requires documentation but not official approval as
before.
The limit on the amount that individuals may transfer from one
bank to another was raised from 3,000 to 10,000 euros per month while
the maximum amount that individuals may transfer outside the country
was raised from 2,000 to 5,000 euros. A 5,000-euro monthly cap on
credit and debit card spending abroad was abolished.
The amount of cash people may take with them while travelling
abroad was raised from 2,000 to 3,000 euros.
A 300-euro withdrawal limit for individuals and a ban on cashing
cheques both remained in place.
Capital controls on banks have been gradually relaxed each week
since they were imposed last month.
Banks in Cyprus suffered a two-week shutdown in March to prevent a
run on the banks while the country was in negotiations with
international lenders on a bailout.
To secure the 10-billion-euro bailout, Cyprus was forced to wind
up one major bank, Laiki, and write off a large portion of secured
debt and uninsured deposits in the largest bank, Bank of Cyprus.
Uninsured savers at the Bank of Cyprus stand to lose up to 60 per
cent of their deposits under the terms of the bailout.
Cyprus' parliament is to begin a debate on the bailout agreement
on April 30.
