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Cyprus Reopens Banks After Nearly Two Weeks Of Crisis


Banks In Cyprus Reopen Amid Financial Crisis
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Banks in Cyprus have reopened after two weeks as the government indicated that restrictions on financial transactions could be lifted within a month.

Cypriots formed orderly queues and waited patiently for banks to reopen, dispelling earlier worries of possible disturbances.

Most accounts were frozen on March 16 to prevent depositors from withdrawing money as a controversial bailout was negotiated.

Lines formed outside banks early on March 28, with armed guards stationed outside to prevent disturbances.

Late on March 27, reports said container trucks loaded with cash pulled up inside the compound of the central bank in Nicosia to prepare for the reopening.

Draconian controls, contained in a Finance Ministry decree, will limit cash withdrawals to 300 euros ($380) per day and ban the cashing of checks.

Other controls will restrict the use of Cypriot credit cards outside the island and limit the amount of euros in cash that citizens will be allowed to take when traveling abroad.

Finance Minister Michalis Sarris cited the "lack of substantial liquidity and significant risk of deposits outflow, with possible outcome the collapse of the credit institutions" as the reasons for the restrictions. He said this could have "destabilizing consequences on the economy as a whole."

Cyprus is the first eurozone country to impose capital controls.

But Foreign Minister Ioannis Kasoulides said the restrictions could be lifted within a month "if everything goes as well as it did today."

The restrictions come as Cyprus seeks to raise 5.8 billion euros ($7.5 billion) to qualify for a 10 billion-euro ($13 billion) bailout from the so-called troika -- the European Union, European Central Bank, and International Monetary Fund.

Under a deal agreed in Brussels on March 25, depositors with more than 100,000 euros face losing a large portion of their money. Cyprus also agreed to reforms its banking system exposed to Greek debt.

The agreement helped the Mediterranean island avoid financial meltdown but has also caused anger at home.

On March 27, some 2,000 antiausterity protesters marched on the presidential palace to protest the rescue package.

With reporting by AFP and Reuters
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