Cyprus scraps maximum daily cash withdrawal limits
The Finance Ministry has issued a decree scrapping the daily cash withdrawal limits from bank accounts one year after Cyprus imposed capital controls to prevent economic meltdown.
CYPRUS abolished maximum daily cash withdrawal limits from bank accounts on Friday, a year after it imposed capital controls to prevent economic meltdown and a flight of cash under the terms of a painful international bailout.
In a decree issued by the finance ministry, the €300 limit per person per day was scrapped, along with restrictions on breaking fixed-interest time deposits prior to maturity.
The decree also allowed, under conditions, individuals to open bank accounts in other credit institutions. The finance ministry said the decision was taken because a performance-linked roadmap of stabilising the banking sector had been met.
One of the benchmarks was completing the merger of Co-Op banks, a network of small lenders which received bailout money under terms of €10 billion in international aid to Cyprus.
Individuals were also allowed to transfer up to €50,000 in funds per month without supporting documentation, and businesses €200,000, the finance ministry said.
Out of the woods? Well the fact that international attention has died down is good because it provides quiet time to fix the easy stuff. But all these banking and economic moves are typical short-term band aids for the critical ills that such economies share We therefore doubt the road ahead is clear.
The questions that we ask first relate to whether the country has any form of long-term economic plan along with the resources to see it through? How will it differentiate itself amoung international competitors? Is it sustainable?
As far as we can see the economic growth here has outstripped its physical capacities and so building a formidable economic advantage weights in as an extraordinary challenge. It faces the same past, present and future as similar Island nations of note - Iceland, Ireland, Japan - and, of course, Nauru.
In short, these woods have many other travellers and look deep and dark.
Platinum Wealth Partners
April 1, 2014