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Cypriots anxious as banks reopen with limits

People gather in front of a bank in Nicosia, Cyprus, on Thursday as the country’s banks opened after 12 days of closure. The country has imposed daily withdrawal limits of about $384 for individuals.

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People gather in front of a bank in Nicosia, Cyprus, on Thursday as the country’s banks opened after 12 days of closure. The country has imposed daily withdrawal limits of about $384 for individuals.

NICOSIA, Cyprus — Anxious Cypriots patiently waited in long lines to get at their accounts Thursday after banks opened for the first time in nearly two weeks, following an international bailout to save the country's financial system.

Fearing a run on its banks, the tiny Mediterranean country has imposed daily withdrawal limits of 300 euros, or about $384, for individuals and 5,000 euros for businesses — the first so-called capital controls any country has applied in the eurozone's 14-year history.

Financial strains are building on families and businesses, and the recession in Cyprus is likely to deepen. The mood outside banks was calm. Many people said the withdrawal limits were probably necessary to keep a bad situation from spiraling out of control.

Banks had been shut in Cyprus since March 16 to prevent people from draining their accounts as politicians scrambled to save the country's stricken financial sector. ATM machines were working, but with a limit on daily withdrawals.

An initial plan to seize up to 10 percent of all Cypriot deposits caused an international uproar and was scrapped. But to secure 10 billion euros in loans from other euro countries and the International Monetary Fund, Cyprus agreed Monday to wind down its second-largest bank and seize billions from accounts holding more than the insured limit of 100,000 euros.

Government and bank officials had feared that up to 10 percent of the country's deposits could be siphoned off when banks opened Thursday, but that did not appear to happen. Guards from private security firms reinforced police outside some ATMs and banks in the capital, Nicosia. No problems controlling crowds were reported.

Cypriots anxious as banks reopen with limits 03/28/13 [Last modified: Friday, March 29, 2013 12:20am]

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