Banks in Cyprus have reopened for business, but it appears that suppliers are reluctant to accept letters of credit (L/Cs) from the country's banks.

Cypriot banks opened up for business on 28 March, albeit with limits on transactions, after being closed for nearly two weeks.

Import reliant

While there are no formal restrictions on L/C business, exporters to import-reliant Cyprus say fears over the stability of the country's banks are prompting them to refuse accepting L/Cs from Cypriot banks.

Instead, exporters are asking for either L/Cs from banks based outside Cyprus or even insisting on cash-in-advance payments.

Cash restrictions

But even cash payments may prove difficult since there are restrictions on money leaving the country.

Other limits on banking transactions, the first in the 14-year history of the euro, include caps on withdrawals.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.