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Business

Cyprus to lift capital controls in January

The Cypriot government is seeking to scrap laws banning the outflow of capital from its ailing banks. The move, due in January, follows positive assessments by the country’s foreign creditors about its bailout program.

Cyprus is planning to end all restrictions on the movement of capital within a timeframe ending January 2014, Cypriot President Nicos Anastasiades told Bloomberg news agency in an interview released Wednesday.

Anastasiades said his country would do the best at implementing its agreement with international creditors, adding that the primary goal now was to create a stable financial system, tackle unemployment and create economic growth.

"What's important too is the behavior of Cypriots - a responsible stance, without reactions, without strikes, labor peace," he added.

Cyprus, which the third-smallest country in the 17-nation eurozone, imposed capital controls in March 2013, in the wake of a severe banking crisis as a result of huge bank losses on Greek government debt.

Wednesday's announcement came after the International Monetary Fund (IMF) had released about 84 million euros ($113 million) in bailout funds to Cyprus. The IMF, along with the European Union's rescue fund ESM, is the main international creditor of Cyprus, providing a total of 10 billion euros in emergency loans to the country.

Noting commendable progress in implementing the bailout program, IMF director Christine Lagarde said the Cypriot government had made strides in restoring financial stability and sustainable public finances.

In July this year, the European Central Bank and the European Union executive Commission already stated that the Cyprus restructuring program was on track.

uhe/mz (AFP, Reuters, Bloomberg)

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