The government of Cyprus has lifted several restrictions on banks imposed under the island's recent austerity measures.

As a result, certain letters of credit (L/Cs) and bank guarantees, which have been very hard to come by during the austerity measures, should become more available.

Credit facilities

Following the government's move, foreign banks will be allowed once more to open new accounts with credit facilities that will enable account holders to obtain L/Cs and bank guarantees.

At the same time, the government has lifted all remaining restrictions on domestic banking, signalling a satisfactory rate of local liquidity and a reduced risk of capital flight.

International restrictions

Eurozone finance ministers imposed harsh austerity measures on Cyprus 14 months ago as part of a EUR 10 billion bailout of the island's collapsed banking system.

Several restrictions remain on international transactions and some types of L/Cs and bank guarantees are still only available provided strict conditions are met.

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