As capital controls in Cyprus are to kick in, and most remain sceptical that they'll last just a week, many are scrabbling to determine a method of assessing the value of the Cypriot euro. The euro in Cyprus is no longer worth the same as a euro in Germany, as Cypriots can not use their euros there freely. While Cyprus may not have formally left the euro, it is only a matter of time that it does or the euros will simply leave Cyprus when capital controls are loosened.
So what can be done? Suggestions below.
Reuters' Felix Salmon:
We need a market in CypEuro depositary receipts, to get the CypEuro:Euro exchange rate.— felix salmon (@felixsalmon) March 27, 2013
.@defunctecon no, the important number is how much a German investor would pay for a deposit at a Cyprus bank.— felix salmon (@felixsalmon) March 27, 2013
Donovan (UBS): The limit on how much cash can leave Cyprus (€3,000/person) could allow economists to calculate the value of the Cypriot lira— Fabrizio Goria (@FGoria) March 28, 2013