Economics

What is the Currency of Cyprus?

The official currency of Cyprus is the euro.

Description

The 9,251 kilometer squared Cyprus Island is located in the north-eastern part of the Mediterranean Sea. It is south of Turkey and Nicosia is its capital. Cyprus is a republic, the largest island in the eastern Mediterranean, and the third smallest European Union (EU) country, after Luxembourg and Malta according to EU reports. It has an estimated population of 1.17 million according to 2016 World Bank data, and its official language is Greek. Turkish is also spoken. The Greek Cypriot population makes up nearly 80% of the population and the Turkish Cypriot population is around 18% of the population. Having been a member of the European Union (EU) since January 1st, 2008, Cyprus’ official currency is the euro which replaced the Cyprus Pound.

Governance

The 1960 constitution allows both Greek and Turkish Cypriot communities to have power balance in proportion to their communities’ population. Cyprus is a former British colony which gained independent in 1960 and it is administered through the presidential system of government. As a democracy, Cyprus holds elections to elect an executive president every five years. The country’s legislature has a House of Representatives elected through universal suffrage. According to a factsheet by the European Parliament, the Greeks get 56 members in the house and the Turks have 24. Cyprus’ House of Representatives are elected in five year terms. The president appoints an 11 member council of ministers to help him govern through the various ministry dockets.

Economy

Cyprus has a gross national income (GNI) of USD 21.5 billion and has GNI per capita of USD 25,210. Its strong economy thrives on tourism, industries, offshore trading, wholesale and retail trade, transport, hospitality, food services, defense, public administration, education, health, social work and real estate, and agriculture, according to EU reports. The island’s main export trade partners are Greece, Ireland, and UK while its import trade partners are Greece, UK, and Italy. In 2013, the Cyprus economy suffered a severe recession from which the country has almost recovered from.

Currency

From 1879 to 2007, Cyprus’ currency was the Cyprus Pound (CYP), also called the Lira. The CYP had been introduced to Cyprus by the British in 1879. On January 1s, 2008, when Cyprus joined the EU, the republic’s official legal tender became the euro. At the time, the exchange rate of one euro to the CYP was 0.585274, according to European Central Bank (ECB). Prior to the euro becoming the official currency in Cyprus in early 2008, distribution of its currency notes and coins to banks and companies had began in October and November 2007. The early distribution ensured a smooth cash changeover and lowered the costs of dual currency circulation. Local banks and cooperative credit societies have been exchanging CYP for euros at a fee if the amount is over CYP 1000 for notes with the deadline for the exchanges set to expire on December 2017, according to ECB.

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