News Column

Cyprus Relaxes Controls on Capital Movement

April 26, 2013

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.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters