Calm prevails as banks reopen in Cyprus amid continued uncertainty

Cypriot banks opened on Thursday for the first time since March 15 without the panic that some had predicted but with confusion still reigning with regard to how long capital controls would remain in place on the island.

The lenders opened their doors to customers at noon as orderly queues formed outside. As a result of the restrictions imposed by the Central Bank of Cyprus, cash withdrawals were limited to 300 euros. There were even some cases on Thursday of customers wanting to deposit money.

People’s calmness in the face of the uncertainty surrounding their deposits and Cyprus’s economic future impressed many foreign correspondents. In some cases, the journalists remarked that there were more reporters outside the banks than customers.

Cypriot President Nicos Anastasiades tweeted a message of thanks to his countrymen for the restraint they showed. “I would like to thank the Cypriot people for the maturity and collectedness they showed in their interactions with the Cypriot banks,” he wrote. Anastasiades took to the social networking service several hours later to make it known that he would be cutting his salary by 25 percent.

However, there was confusion on Thursday over how long the restrictions on the movement of money would be in place. The Cypriot government had indicated on Wednesday that the capital controls would last for four days. However a statement from the European Commission yesterday morning indicated the limits would be enforced for a week.

“While the imposed restrictive measures appear to be necessary in the current circumstances, the free movement of capital should be reinstated as soon as possible in the interests of the Cypriot economy and the European Union’s single market as a whole,” the Commission said.

Speaking to reporters later in the day, Cypriot Foreign Minister Ioannis Kasoulides indicated the capital controls would be in place for longer than a week. “A number of restrictions will be lifted, and gradually – probably over a period of about a month according to the estimates of the central bank – the restrictions will be fully lifted,” he told reporters.

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