Cyprus received a €10bn bailout from the EU and International Monetary Fund (IMF) after its biggest banks nearly collapsed in March 2013 because of huge losses on their Greek investments. The Greek debt crisis had a severe impact on Cypriot banks, which lost about €4.5bn worth of Greek sovereign bonds – equivalent to 25% of Cypriot gross domestic product, Reuters news agency reports.
There will no longer be a monthly cap of €20,000 (£15,000; $22,000) on transfers by individuals to foreign banks, or of €10,000 for travellers moving money out of the country.
Speaking on Friday, Cyprus President Nicos Anastasiades voiced confidence that the Mediterranean island was recovering well, despite three years of recession.
Lifting capital controls, he said, was “a vote of confidence in our banking system which, now fully independent of Greek banking institutions, can move forward”.