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Cyprus imposes controls, withdrawals only 300 euros a day

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(Globalpost/GlobalPost)

Cyprus Finance Minister Michalis Sarris imposed temporary capital controls on Wednesday following the island's EU-IMF bailout, stipulating a maximum cash withdrawal of 300 euros a day.

The decree carried on state media also bans people from taking more than 1,000 euros ($1,300) in cash out of the Mediterranean island, with customs officers authorised to check people, and prohibits the cashing of cheques.

The controls were imposed ahead of the reopening of Cyprus banks on Thursday. They have been closed since March 16 while the country negotiated a eurozone rescue package.

Sarris cited as the "lack of substantial liquidity and significant risk of deposits outflow, with possible outcome the collapse of the credit institutions" as the reasons for the restrictions.

He said in the decree this could cause "chain effects that could lead to systemic instability of the financial system and have destabilising consequences on the economy as a whole."

The controls also impose a limit of 5,000 euros a month in credit or debit card purchases while out of the country.

Non-cash payments or money transfers outside Cyprus are prohibited, with some narrowly defined exceptions such as paying by parents of tuition fees and accommodation for children studying in schools and universities abroad.

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http://www.globalpost.com/dispatch/news/afp/130327/cyprus-imposes-controls-withdrawals-only-300-euros-day