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Cyprus keeps capital controls in place

Cyprus says it is necessary to keep capital controls in place until trust is restored in the country's ailing banking system

AP, Thursday 9 May 2013
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Cyprus' Central Bank chief says it's necessary to keep capital controls in place until trust in the bailed-out country's ailing banking system is restored.

Panicos Demetriades said Thursday the Central Bank wants to eliminate these controls as soon as possible, but it has to first take into account the risk of mass deposit withdrawals if they are lifted too soon.

Cyprus introduced strict controls, such as a 300-euro ($400) daily withdrawal limit, in March to forestall a run on its banks after it agreed on a 23 billion euro ($30 billion) rescue package with its euro partners and the International Monetary Fund.

The rescue deal's terms demand that depositors in the country's two biggest banks take major losses on their savings over 100,000 euros.

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