Well, this might be our first market quote of how much a “Cypriot Euro” is worth.
Remember, last week after large depositors in Cyprus were haircutted, and the government instituted capital controls to prevent money from fleeing, a number of economists argued that Cyprus essentially had its own currency the Cypriot Euro.
If you can’t easily move your money out of a Cypriot bank account, then said euros are worth less than the same nominal account in, say, a German bank.
So how much less is a Cypriot Euro worth than a regular euro? Maybe 20% less
From Peter Spiegel at FT:
Sergei Tyulenev, a Russian businessman, says he received a call on Thursday – the day the capital controls were implemented – from Cypriots he did not wish to identify offering to help him move what he implied was more than €1m out of a collapsing local bank.
There was a catch though, on top of the illegality of the move. “They said I had to pay €200,000 up front. I refused,” said Mr Tyulenev, speaking from Limassol, a town dubbed “Limassolgrad” for its high proportion of Russian residents.
Meanwhile, at airports, authorities are finding attempts by people to remove tons of cash from the country, in violation of the law.