Cyprus reopens its banks today while limiting withdrawals, banning cheques and curbing the use of Cypriot credit cards abroad, among measures imposed to avert a bank run after it agreed a tough rescue deal with international lenders.
Cypriots would not be permitted to send money overseas without documentation showing they are paying for imports
The Central Bank said banks would open their doors at midday (1100 CET) today after nearly two weeks when Cypriots could only get cash through limited ATM withdrawals.
A central bank official said Cypriots would be allowed to withdraw no more than €300 a day.
Yiangos Demetriou, head of internal audit at the Central Bank, said on state television that the controls would allow unlimited use of credit cards within Cyprus, but set a limit of €5,000 per month abroad. The measures would last four days but could be reviewed.
Other details of the controls had yet to be officially announced by late last night.
According to a draft of a government decree leaked to Greek newspaper Kathimerini, Cypriots would not be permitted to send money overseas without documentation showing they are paying for imports.
Those travelling abroad could take a maximum of €3,000 on each trip, according to the draft.
Early withdrawals of funds deposited with banks for a fixed term would be banned. Cypriot officials said the draft published by the newspaper was genuine but not necessarily final.
The European Central Bank delivered extra banknotes to Cypriot banks yesterday evening to meet demand, a source familiar with the situation said. The ECB declined to comment.
Finance Minister Michael Sarris has said capital controls will be “within the realms of reason”. But Cypriots, fearing for their savings and angered by the bailout deal struck on Monday in Brussels, are expected to besiege banks.
Under the bailout, Cyprus’s second largest bank will be closed and its guaranteed deposits of up to €100,000 transferred to the biggest bank.
Deposits of more than €100,000 at both banks would be frozen.
Big depositors will lose money, but the authorities say deposits up to €100,000 will be protected, a reversal from an earlier plan that would have hit small depositors as well.
Cypriots have taken to the streets of Nicosia in their thousands to protest against a bailout deal that will push their country into an economic slump and cost many their jobs.
European leaders said the bailout deal averted a chaotic national bankruptcy that might have forced Cyprus out of the euro.