Cyprus to limit cash, credit-card use abroad

Wed Mar 27, 2013 3:00pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Michele Kambas and Costas Pitas

NICOSIA (Reuters) - Cyprus is set to restrict the flow of cash from the island and may curb the use of Cypriot credit cards abroad as it tries to avert a run on its banks after agreeing a tough rescue package with international lenders.

A Greek newspaper published details of what officials told Reuters was as yet only a draft government decree to restrict outward payments to documented imports and limit how much people could take abroad in banknotes or spend on credit cards.

With banks due to reopen on Thursday after nearly two weeks, Finance Minister Michael Sarris said capital controls would be "within the realms of reason". But Cypriots, fearing for their savings and angered by the bailout deal struck on Monday in Brussels, are expected to besiege lenders in the morning.

Athens newspaper Kathimerini, citing the government decree, said measures would remain in force for seven days after the banks reopen. Cypriots wanting to send money overseas would have to prove that the transactions meet strict rules laid out by the authorities. The decree allows businesses to pay for imports if they provide officials with the necessary documentation.

The use of credit and debit cards overseas would be restricted to 5,000 euros per month, and individuals travelling abroad could take a maximum of 3,000 euros on each trip. Funds deposited with banks for a fixed term cannot be withdrawn early.

Officials at the Cypriot central bank and finance ministry told Reuters that the newspaper report was based on draft proposals and a final version had yet to be adopted.

Cypriots have taken to the streets of Nicosia in their thousands to protest against a bailout deal that will push their country into an economic slump and cost many their jobs.

Some 500 protesters marched from the EU offices in Nicosia towards the presidential palace on Wednesday. Waving banners and flags, they chanted: "I'll pay nothing; I owe nothing."   Continued...

A protester stands atop the fence at the Presidential Palace during an anti-bailout rally in Nicosia March 27, 2013. REUTERS/Yannis Behrakis