The Cyprus economy is mature enough to lift capital controls

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International banks operating in Cyprus could significantly contribute to the recovery of the island’s economy, the chairman of their association said, as he urged the government to lift the remaining capital controls to allow them to realise their full potential.
International banks operating in Cyprus could significantly contribute to the recovery of the island’s economy, the chairman of their association said, as he urged the government to lift the remaining capital controls to allow them to realise their full potential. Mr Kirill Zimarin, chairman and CEO of RCB Bank said: ‘International banks have significant reserves in terms of capital and liquidity, and are ready to extend their lending programmes to Cypriot companies’.

International banks have seen their market share by assets grow by almost 22%. ‘International banks are reaffirming their commitment to develop business in Cyprus and continue promoting it as an international financial centre,’ he stated.

However to fulfil its potential growth, Cyprus should lift the remaining capital restrictions concerning overseas transactions. ‘The figures show that Cyprus economy is recovering, and is mature enough for capital restrictions to be lifted in full. This would enable international banks to realise the potential they have to support economy in Cyprus and any Cypriot borrowers,’ he said.

Cyprus introduced capital controls in April 2013 to prevent a cash shortage after the bailout occurred and forced the closure of one bank, whilst another bank seized deposits to recapitalise. It was the first time controls were imposed in the Eurozone’s history.

It has since lifted all domestic controls but despite being eased significantly, restrictions remained on international transactions. Last week authorities raised the limit on cash transfers abroad to €2.0 million from €1.0 million.