Euro banknotes have been supplied to Cyprus as a precautionary measure and the quantity greatly exceeds how much is needed, a spokesman for the Bundesbank said.
The notes were part of a stock that the European Central Bank holds at the German institution, a spokesman for the Bundesbank in Frankfurt said by telephone today. The ECB asked the German institution to transport banknotes to the Cypriot central bank before lenders opened today after a closure that lasted almost two weeks, he said.
The spokesman declined to comment on the amount transferred. German newspaper Handelsblatt reported earlier today that the Bundesbank flew 5 billion euros ($7.6 billion) of its own notes to the Mediterranean island.
The amount of banknotes provided to the Cypriot central bank is much larger than what’s needed and is a precautionary measure to prevent commercial banks from running out of cash and to avoid panic, the spokesman said.
Cypriot banks closed on March 16 when European finance ministers proposed a levy on deposits as a condition for a European Union-led bailout. The government implemented capital controls to prevent a bank run, which include a 300-euro daily limit on withdrawals and restrictions on transfers to accounts outside the country.