Cyprus capital controls to remain in place

first_imgCyprus will keep capital controls in place until it is more confident that its ailing banks will not face a run. Governor of Cyprus’ Central Bank Panicos Demetriades said the Bank wants to eliminate these controls as soon as possible, but it has to first make sure that trust in the banks has recovered sufficiently. He said a rush of withdrawals would put additional strain on the banks that they can hardly afford right now. “We have to keep in mind the dangers of easing (restrictions) overly quickly,” Demetriades told a press conference. “We have to be careful with these relaxations. It’s more important to see how trust can be restored in the banking system.” Cyprus introduced strict limits, such as a 300-euro daily withdrawal limit, in March to forestall a run on its banks after it agreed on a 23bn euro rescue package with its euro partners and the International Monetary Fund. The rescue deal’s terms demand that depositors in the country’s two biggest banks take major losses on their savings over 100,000 euros. The Central Bank had always refused to estimate how long the controls would last, though government officials have said they would last several weeks. Some of the controls, such as bank money transfers, have been eased to help local companies do business. But many others – such as the daily withdrawal limit – remain in place.Source: Enet English. Facebook Twitter: @NeosKosmos Instagramlast_img read more