After limiting access to bank accounts and credit cards earlier this week, Cyprus is now clarifying that any imposed limits do not apply while inside the country. In order to revive the stalled economy – which was caused by a series of issues that nearly resulted in the bankruptcy of the entire country – Cyprus' central bank made the announcement that there are no limits on debit or credit transactions while located within Cyprus itself.
The central bank announced earlier this week that a limit of 5000 euros would be imposed on credit and debit card purchases made outside the country, but many within the country took this to mean a limit on all transactions. Faced with a stalled consumer economy at the moment, Cyprus officials are doing everything they can to revive their economic engine.
This follows a government-ordered shutdown of the banks in order to prevent clients from creating a rush on the banks. In order to further prevent instability, the nation unveiled capital controls that limited withdrawals for individuals to 300 euros per day.
These actions have been referred to as both “needed” and “extreme”; while the European country's economy appears to be salvaged for the time being, the capital controls that were implemented are a first for any country within the European Union.
In addition to the cash withdrawal limits for residents, there is also a limit in the amount of currency that can be carried from the southern part of the island (Greek) to the northern part of the island (Turkey). As of now, that limit is 300 euros for residents and 500 euros for travellers.
While the country has its own identity, it is also segmented due to a 1974 invasion of the country by Turkish forces. This creates situations in which financial concerns can ripple across the economies of multiple countries – much more so than any other EU nation.
The central bank of Cyprus has announced that the current debit and credit card limitations imposed on individuals only apply when outside of the country. Residents of the country can use their cards in consumer affairs without worry. With a stagnant economy at the moment and much of everyday business impacted by the financial crisis, the government and central bank are doing everything it can to encourage citizens to resume spending once again.