Cyprus Lifts Capital Controls Two Years After Deposits Bail-In

Today (06/04/2015), Cyprus has lifted capital controls imposed in 2013 amid a chaotic banks’ bailout. The lifting of the last restrictions marks the final restoration of confidence in the Cypriot banking system. Cyprus introduced the controls in April 2013 to prevent outflows after Laiki bank was closed and a BoC seized deposits to recapitalise. Since then controls have been gradually eased.

The last remaining, included in a finance ministry decree last month, required authorities’ approval for businesses sending large remittances overseas, and individual travellers moving more than €10,000 out of the country. Asked about the timing of the easing while Greece was in crisis over its own bailout programme, Mr Anastasiades said: “We want to hope that there will be no further deepening of the crisis with Greece”. Cypriot banks, he said, had fully severed their links with the Greek banking system following the 2013 crisis.

All domestic capital restrictions were lifted last May, with the prohibition on opening bank accounts being the last. Since the crisis struck in 2013 deposits shrank to €46.5 billion at the end of February compared with €65.5 billion in the same month of 2013.

After a three-year recession Cyprus expects to return to marginal growth in 2015.

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