Cyprus Currency
The currency of the Republic of Cyprus is the Euro (€) and it is divided into 100 Euro cents (¢). Cyprus switched to the Euro on January 1st, 2008. Prior to that, it had been using the Cypriot Pound as its currency.
History
The pound sterling unit was introduced by British to Cyprus in 1879 at a rate of one to 180 Turkish piastres which remained equivalent in value to the pound sterling until 1972 and was at first divided into 20 shillings. The shilling was divided into 9 piastres (or grosia), thus creating a classification link to the earlier currency. The piastre was itself divided into 40 para, however this denomination did not appear on any coins or banknotes but was used on postage stamp. Cyprus decimalized with 1000 Mils the pound in 1955. The 5 mil coin was known as a “piastre” and the 50 mil coin exactly is as a “shilling.” In 1983, the subdivision was changed to 100 cents to the pound in 1983 and the smallest coin still in exchange was that of 5 mils which was renamed as ½ cent, but soon was closed down. Some business owners omitted the 1 and 2 cent coins towards the end of the Cypriot pound era and they often rounded down the net amount to be paid to the nearest multiple of 5 cents.
Cyprus Euro Conversion
Cyprus accepted the obligation to join the euro area once it meets the “Maastricht convergence criteria” laid down in the EC Treaty on its accession to the EU as a member state. The Council of the European Union approved Cyprus’ and Malta’s application to join the euro area on 10 July 2007. Euro replaced the Cypriot pound as official currency of the Republic of Cyprus on 1 January 2008 at the irreversible fixed exchange rate of 0.585274 CYP per 1 euro. Nevertheless, pound banknotes and coins continued to have legal tender status and were accepted for cash payments until 31 January 2008. Till 30 June 2008, Cypriot pounds were convertible free of charge at Cypriot credit institutions. CYP coins were exchangeable at the Central Bank of Cyprus until 31 December 2009 and CYP banknotes will be convertible until 31 December 2017.
The adoption of the euro is expected to bring substantial benefits for the Cypriot citizens. In the single market of the EU, Price transparency facilitates price comparability, promotes competition and leads to lower prices. The eradication of the exchange rate risk is favorable to trade transactions, thus also leading to lower prices. As citizens will not have the hassle of changing currencies every time they cross a border, Traveling and buying goods and services in the euro area countries is easier and are better able to evaluate prices since they can use their own currency anywhere in the euro area. In addition, both savers and investors can profit from increased prospect for savings and investment, which surface in the single financial market of the EU.
Furthermore, there exist significant prospective benefits for the economy as a whole, such as price steadiness, strong public finances, low interest rates and a screen for negative shocks in the external environment. These conditions are favorable to prop up economic growth, investment and employment, to the benefit of all citizens.
5, 10, 20, 50, 100, 200 and 500 Euro banknotes denominations are available and all have different color and size, the higher the denomination, the bigger the size. One euro is divided into 100 cent. There are eight euro coins: 1, 2, 5, 10, 20 and 50 cent, €1 and €2. The designs on one side of the coins are common to all the countries of the euro area, while the other side reflects national identities. Each country participating in the euro can design its own motifs and symbols for the national side of its coins. All Cypriot banks operating offer foreign currency exchange services and quote the exchange rates of the Euro against all major foreign currencies daily. Foreign currency can also be exchanged at hotels. More detailed information concerning exchange rates can be obtained from Central bank of Cyprus website.
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