Cypriot banks to stay shut until Thursday

City A.M. Reporter

CYPRUS banks are to stay shut until Thursday and will be subject capital controls to prevent a run on deposits.

After returning from fraught negotiations in Brussels, President Nicos Anastasiades said late last night that the €10bn (£8.5bn) rescue plan agreed there in the early hours of the morning was "painful" but essential to avoid economic meltdown.

He agreed to wind up the Popular Bank of Cyprus – or Laiki – and inflict heavy losses on big depositors.

Some Cypriot banks were due to open today, but the central bank said late last night that they would all stay shut until Thursday to ensure the “smooth functioning of the whole banking system”.

Anastasiades gave little detail of the restrictions on transactions, although he said that it would be a “temporary measure that will gradually be relaxed”.