Cyprus tells its citizens how much money they can spend after €10bn bailout

Limits imposed on cash transfers as island scrambles to prevent a run on its banks

Nicosia

Cyprus will be detached from the eurozone today as its government scrambles to stop money flooding out of the country.

The Cypriot Central Bank last night announced a series of capital control measures that restrict the flow of funds from the island, as well as putting a limit on what Cypriots can spend overseas on their credit cards.

The measures – which are for an initial period of four days but could be in force for longer – are timed to kick in as the island’s banks reopen this morning. They include:

* The suspension of most electronic money transfers abroad, with some exceptions for imports.

* A limit of €1,000 in cash a person can take out of the country, which will be enforced at the island’s borders.

* A ban on cashing cheques, although people will still be able to pay money in to their accounts.

* A limit of €5,000 a month on credit card spending abroad.

* A €300-a-day cap on cash withdrawals at ATMs or over the counter.

Cyprus’s banks have been shut for 12 days as the island’s government battled with the European Union and the International Monetary Fund over how it could raise the €5.8bn it needed to trigger a €10bn bailout that would allow it to remain solvent.

The eventual deal signed in Brussels on Sunday will see amounts over €100,000 in the two biggest banks frozen. This money will be unavailable when banks reopen, but the government has reassured people that all deposits under €100,000 will be protected. Officials fear a general panic as ordinary Cypriots, fearful of further turmoil ahead, try and get their hands on their cash. Businesses and foreign account holders could also try and move money to more secure countries.

Banks will open from midday to 6pm, the central bank announced last night, while extra security guards will be on duty to prevent any disorder. “We will look at the best way to limit the possibility of large sums of money leaving, and not imposing punitive conditions on the economy, businesses and individuals,” Cyprus’s Finance Minister, Michael Sarris, told a local television station.

“It’s humiliation,” said Giota Vrassidou, who owns a bar in Nicosia, as she wiped the tears from her eyes. “I doubt I’ll be seriously hit but I’m sure my clientèle will drop as liquidity will run dry.” Haro Kuyumjian, the owner of a textile company, agreed: “My main concern is my clients and their purchasing power with these controls.”

The controls are to be reviewed after the initial period has expired. While business owners said they understood why controls on the movement of money have been put in place, many were worried they could cripple the island in the short term.

Constantine Economides, managing director at Orangefield Cyprus, one of the island’s largest corporate services providers, said he thought the controls were “absolutely necessary”.  But he also warned that the island would feel their effect. “It will certainly hinder the economy of Cyprus and slow down most economic activity here,” he added.

Mr Economides said that most of his clients were seeking temporary solutions, such as opening bank accounts abroad.

Adding to the uncertainty in Cyprus, the chief executive of the Bank of Cyprus,Yiannis Kypri, was sacked yesterday by the central bank. As part of the bailout, the second largest lender, Laiki, is due to be shut down with small deposits merged with the Bank of Cyprus, the largest lender. But there is still ambiguity about the scale of restructuring at the Bank of Cyprus.

News
Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
Sport
sportDidier Drogba returns to Chelsea on one-year deal
Arts and Entertainment
The Secret Cinema performance of Back to the Future has been cancelled again
film
News
people
PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
Sport
Louis van Gaal would have been impressed with Darren Fletcher’s performance against LA Galaxy during Manchester United’s 7-0 victory
football
Voices
The new dawn heralded by George Osborne has yet to rise
voicesJames Moore: As the Tories rub their hands together, the average voter will be asking why they're not getting a piece of the action
Sport
Dejan Lovren celebrates scoring for Southampton although the goal was later credited to Adam Lallana
sport
News
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Arts and Entertainment
Jo Brand says she's mellowed a lot
tvJo Brand says shows encourage people to laugh at the vulnerable
Life and Style
People may feel that they're procrastinating by watching TV in the evening
life
Sport
Rhys Williams
commonwealth games
News
Isis fighters travel in a vehicle as they take part in a military parade along the streets of Syria's northern Raqqa province
i100
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
Life and Style
fashionLatex dresses hit the catwalk to raise awareness for HIV and Aids
Travel
travel
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Senior Risk Manager - Banking - London - £650

£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

Commercial Litigation Associate

Highly Attractive Package: Austen Lloyd: CITY - COMMERCIAL LITIGATION - GLOBAL...

Systems Manager - Dynamics AX

£65000 - £75000 per annum + Benefits: Progressive Recruitment: The client is a...

Service Delivery Manager (Software Development, Testing)

£40000 - £45000 per annum: Ashdown Group: A well-established software house ba...

Day In a Page

Finding the names for America’s shame: What happens to the immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert?

Finding the names for America’s shame

The immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert
Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears