Cyprus imposes capital controls as banks reopen

Cyprus imposes capital controls as banks reopen

After an enforced holiday of nearly two weeks, banks in Cyprus have finally reopened today but with capital controls that restrict cash withdrawals, card transactions, cheque cashing and money transfers abroad.

Bank customers can withdraw only EUR300 a day from their accounts while the cashing of cheques has been banned. In addition, those travelling abroad cannot take more than EUR1000 out of the country and transfers outside of Cyprus via card are limited to EUR5000 a month.

The Cypriot government says that the measures are necessary to "safeguard the stability of the system" by preventing a run on deposits during "exceptional circumstances". The controls will be reviewed daily in the hope that they can be gradually lifted.

Cyprus becomes the first eurozone country to ever apply capital controls in a move which is at odds with the EU's central principals.

However, in a statement, the EC says: "In current circumstances, the stability of financial markets and the banking system in Cyprus constitutes a matter of overriding public interest and public policy justifying the imposition of temporary restrictions on capital movements."

Branches and ATMs were replenished with cash overnight and security has been stepped up, with armed police and private security staff outside buildings and helping to transport money.

However, reports from the island suggest that there has not been the panic and violence that some feared:

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