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Banks reopen in Cyprus after two-week closure

Flag_of_CyprusBanks in Cyprus have re-opened for the first time in nearly two weeks, though the government has imposed strict capital controls to prevent a run on deposits after the country was forced to accept an international bailout to prevent bankruptcy.

On Thursday, lines of bank customers formed outside the branches of the Bank of Cyprus and Cyprus Popular Bank—or Laiki, the nation’s two largest lenders, Al Jazeera reports.

The Cypriot government has imposed limits on daily cash withdrawals to $385 to prevent a run on banks that could harm the nation’s already destabilized economy. While banks will accept check deposits, they will not cash checks. Citizens are prohibited from leaving the country with more than $1,282, and international wire transfers out of the country are also prohibited.

On Wednesday evening, hundreds of demonstrators marched from Cyprus’ EU offices to Parliament to protest the bailout package. Armed police officers stood guard among several containers arriving at the nation’s central bank, and while the contents of the containers cannot be confirmed, state-run media said the containers carried cash flown in from Germany to be used in the banks’ reopening, according to Al Jazeera.

Beginning March 16, banks closed as Cypriot officials attempted to devise a plan to raise $7.5 billion to contribute towards its own bailout from international lenders, including the European Central Bank and International Monetary Fund, which agreed to provide nearly $13 billion in funds so long as the nation could raise the $7.5 billion.

The deal reached on Monday imposes a tax on deposits totaling more than $128,000. Since the deal, the nation’s officials have rushed to impose restrictions to prevent a flood of money out of the country when the banks reopen, Al Jazeera reports.

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