Cyprus set to impose capital controls - report

Cyprus is to impose a ban on cashing cheques and limit the amount of cash that can be taken out of the country under a series of measures to avert a run on the country's crippled banks, a Greek newspaper has reported.

The Kathimerini newspaper, citing a government decree, said the measures would remain in force for seven days.

They will allow Cypriot businesses to pay for imports if they provide authorities with the necessary documentation but limit the use of credit and debit cards outside Cyprus.

Officials at the Cypriot Central Bank and Finance Ministry said the newspaper report was based on draft proposals and a final version had yet to be adopted.

Earlier, Cypriot Central Bank Governor Panicos Demetriades said his institution was making "super-human efforts" to open the country's banks tomorrow.

The banks have been closed for almost two weeks during which talks took place on the controversial bailout for Cyprus, which was agreed with eurozone finance ministers at the weekend.

Mr Demetriades spoke alongside Cypriot Finance Minister Michalis Sarris as several hundred Bank of Cyprus workers protested outside the Central Bank building.

After the news conference, Mr Sarris said that he is confident the Cypriot banks will open tomorrow.

He said: "I think every day that they are not open creates more uncertainty and more difficulties for people.

"So we would like to do our utmost to make sure that this goal that we have said will work."

All except the country's two largest banks had been due to open yesterday morning after the country clinched a deal with the 17-nation eurozone and the International Monetary Fund to provide Cyprus with a bailout.

However, the central bank made a surprise reversal just before midnight, announcing all banks would remain closed until tomorrow while it and the banks finalise capital controls to limit the amount of money that can be withdrawn.

Under the deal for a €10bn rescue, Cyprus agreed to slash its oversized banking sector and inflict hefty losses on large depositors in troubled banks.

Mr Sarris said authorities hope to limit job losses to a "small number".

"We are looking to a much smaller banking system over time and more concentrated on its core business which is Cyprus and the international business units in Cyprus," he said.

The bulk of the bailout funds will be raised by forcing losses on accounts of more than €100,000 in the country's second-largest bank, Laiki, with the remainder coming from tax increases and privatisations.

The central bank has fired the chief executive of the Bank of Cyprus, an official at the country's largest commercial bank said today.

It follows the appointment of a special administrator to run the bank, which was saved from collapse this week.

The bank's chairman, Andreas Artemis, submitted his resignation yesterday.

An official at the bank, who declined to be named, said local media reports that chief executive Yiannis Kypri had been removed from the post were "valid".

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Cyprus set to impose capital controls - report

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