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Cyprus Central Bank eases domestic restrictions

The regulator made the announcement to clarify the capital control rules it introduced this week to prevent a run on the country’s banks.

Image: Petros Karadjias/AP/Press Association Images

CYPRUS CENTRAL BANK tried to kickstart spending in the country’s stagnant economy Friday by telling Cypriots that there were no limits on debit and credit card transactions made inside the country.

The central bank made the announcement to clarify the capital control rules it introduced this week to prevent a run on the country’s banks.

The bank said that while there is a €5,000 limit on credit and debit card purchases abroad, there were no such limits on domestic transactions and money transfers.

Cyprus’s banks had been shut since 16 March to prevent people from draining their accounts as politicians scrambled to save the country’s stricken financial sector.

Fearing a savers would rush to empty their accounts once the banks reopened, the country imposed daily withdrawal limits of €300 for individuals and €5,000 for businesses — the first so-called capital controls that any country has applied in the eurozone’s 14-year history.

Also Friday, the central bank updated a government decree about the amount of cash a person could take from the internationally recognised Greek-speaking south to the breakaway Turkish Cypriot north. While Cypriots can only carry €300 a day, foreign nationals will be allowed to have €500. Cyprus was divided in 1974 when Turkey invaded after a coup by supporters of union with Greece.

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