Cyprus domestic capital controls to be lifted by end of spring, says Georgiades

Cyprus Finance Minister Harris Georgiades told the country’s national broadcaster on Monday that he expects all domestic capital controls to be lifted by the end of spring.

Georgiades said that there would be further steps at the end of the month and later in spring following a February decree that eased domestic capital restrictions as part of an incremental relaxation of currency controls first imposed to prevent a run on its banks in March 2013.

The February 21 Finance Ministry decree scrapped the compulsory automatic renewal of fixed term deposits and increased the allowance on domestic cash transfers for both companies and individuals.

A ban on cashing in cheques and a 300 euro cash withdrawal limit daily remained in force. The daily withdrawal allowance is cumulative from March 27, 2013.

The Mediterranean island became the first eurozone member state to impose capital controls to prevent a collapse of its banking system last March.

It was preceded by a decision to close a major bank, and force depositors to give up savings to recapitalise a second in return for 10 billion euros in aid from the International Monetary Fund and the European Union.

Friday's decree, valid for 35 days, increases the allowance on cash transfers to 20,000 euros for individuals, and 100,000 for companies on a monthly basis, irrespective of purpose. The previous limit was 15,000 euros, and 75,000 euros respectively.

[Kathimerini & Reuters]