Cyprus aims to lift capital controls by 'early 2014'

(NICOSIA) - Eurozone member Cyprus said Wednesday it expects to lift capital controls in early 2014 after they were imposed to avoid a run on the banks during bailout negotiations in March.

Finance Minister Haris Georgiades said the measures to curb capital flight were being lifted gradually and there was no fixed timetable set by the international lenders which provided the 10 billion euro ($13.4 billion) bailout.

Cyprus has established a roadmap toward achieving that goal, but it is not time-oriented and depends instead on conditions being in place to allow the controls to be lifted.

"Translating the roadmap into a timeframe places us indeed in the first months of the new year in lifting all constraints, with the one being left, the most sensitive, which is the international movement of capital," Georgiades told reporters.

A finance ministry spokesman later elaborated, saying: "We are working towards lifting all the restriction by early next year, but this (international movement of capital) might be the last to go. We are aiming to fulfill all our obligations under the troika."

Cyprus agreed the rescue package with the European Commission, European Central Bank and International Monetary Fund to bail out its troubled economy and bloated banking system.

The deal included a restructuring of the banks, with the island's second-largest lender, Laiki, wound up and its good assets folded in to the largest lender, Bank of Cyprus (BoC).

Deposits above 100,000 euros in both banks were subjected to so-called "bail-ins".

Those amounts from Laiki were converted into BoC shares, and 47.5 percent of deposits already held in BoC were also converted.

Fears of a bank run in March forced the government to close all the island's banks for nearly two weeks and impose the draconian controls when they reopened.

There is still a daily 300 euro cash withdrawal ceiling from banks for individuals and 500 euros for businesses, while cheques cannot be cashed and central bank approval is needed for large business transactions.