Despite Euro Adoption Cypriot Currency Still OK For Now
Following concern expressed by foreigners with holiday homes on the Mediterranean island of Cyprus, experts have pointed out that the country’s recent entry into the Euro does not mean that their leftover Cypriot pounds will be completely unusable.
Both Cypriot Pounds and Euros will be in parallel circulation in the country until the end of January and unused old Cypriot notes and coins can be exchanged for euros at any of the island’s banks for the next six months. The Central Bank of Cyprus will exclusively deal with the old currency after this point, so get scouring your sock drawer for any leftover Cypriot notes or coins while you have the chance!
Speaking after the currency changeover on New Year’s Day, European commission president Jose Manuel Barroso said the island had taken a “momentous step” and taken its place at the “very heart” of the EU.
Joining the single European currency is widely expected to have a positive effect on the Cypriot economy and in particular its housing market, which tends to receive a boost most often in the form of overseas property investment from investors hoping to capitalise on rising house prices. Joining the Euro should bring macroeconomic stability to new members, with the aim of maintaining low inflation and a stable economy.
Currently, the Euro is performing positively against sterling which remained stable at around 1.50 Euros to the pound until the credit crunch struck and began weakening during the second half of 2007. Today, it sits at around the 1.30 mark, quite a significant drop affecting both tourism and trade for sterling users. With lower interest rates and a stronger currency, the European Central Bank for now is viewed as being the stronger contender in the battle of the banks.
Derek Watkins said,
March 10, 2008 @ 3:20 pm
It is very interesting to note that Cyprus has many, parameters that have been driving the property market including, the adoption of the €, significant investment in: the infrastructure, Paphos and Larnaca international airports, the promenade at both Paphos and Larnaca, International schools, 3 new marinas and 10 new golf courses central. This has resulted in tremendous capital growth and a real bonanza for property investors over the last three years. However the government seems to be a little concerned about the rate of growth, particularly with the introduction of the € and has taken steps to try and control this by introducing more stringent criteria for lending particularly with the introduction of a minimum 40% contribution for investors. This has now had an impact on the market slowing down sales of new build a little, however this has not really impacted property prices and there is a view that this is only a temporary slow down and that the market will surge out of what is typically a slow time of year for property sales.