Cyprus lifts remaining capital controls imposed on banking system

Cyprus government has decided to lift the last remaining capital controls it imposed on the country’s banking system during the financial crisis of 2013.

Cyprus was the only crisis-hit eurozone country to restrict capital transfers, as it faced a run on the banks.

The controls were eased in January.

There will no longer be a monthly cap of €20,000 ($22,000) on transfers by individuals to foreign banks, or of €10,000 for travelers moving money out of the country.

Cyprus received a €10 billionn bailout from the EU and International Monetary Fund (IMF) after its biggest banks nearly collapsed in March 2013 because of huge losses on their Greek investments.

The island’s second-biggest lender, Cyprus Popular Bank (also known as Laiki Bank), was wound up and deposits worth more than €100,000 in the largest bank, Bank of Cyprus, were seized.

Those measures were part of the deal to ensure that Cyprus funded part of the €10 billion bailout.

Speaking on April 3, Cyprus President Nicos Anastasiades voiced confidence that the country was recovering well, despite three years of recession

Lifting capital controls, Nicos Anastasiades said, was “a vote of confidence in our banking system which, now fully independent of Greek banking institutions, can move forward”.

The Greek debt crisis had a severe impact on Cypriot banks, which lost about €4.5 billion worth of Greek sovereign bonds – equivalent to 25% of Cypriot gross domestic product, Reuters news agency reports.