
Cypriot pound

The Cypriot pound, also known as the Cypriot lira ( / plural "λίρες" and Turkish: "lira", from the Latin "libra" through the Italian "lira"), was the currency of Cyprus, including the Sovereign Base Areas in Akrotiri and Dhekelia, from 1879 to 2007, when the Republic of Cyprus adopted the euro. However, the self-proclaimed Turkish Republic of Northern Cyprus used and still uses on the official level the Turkish lira.
The Cypriot pound was introduced in 1879 and was equal in value to the pound sterling. It had remained at that value until 1972, some twelve years after Cyprus gained independence from the United Kingdom. The Cypriot pound was replaced by the euro as official currency of the Republic of Cyprus on 1 January 2008 at the irrevocable fixed exchange rate of CYP 0.585274 = €1.00.
History.
The British introduced the Cypriot pound in 1879. It had the same value as the British pound sterling, and was valued at a rate of one pound to 180 Turkish piastres. It was initially divided into 20 "shillings" ("σελίνι" / "σελίνια", "şilin"), in common with its United Kingdom counterpart. However, unlike the United Kingdom shilling, the Cyprus shilling was divided into 9 "piastres" ("γρόσι" / "γρόσια", "kuruş"), thus establishing a nomenclature link to earlier Ottoman currency. The piastre was itself divided into 40 "para" (like the kuruş). The para denomination did not appear on any coins or banknotes but was used on postage stamps. However, the -piastre coin was equal to 10 para (παράδες) and called δεκάρα in Greek and the -piastre coin was equal to 20 para and called εικοσάρα. The Cypriot pound remained equal in value to the pound sterling until 1972, some twelve years after Cyprus gained independence from the United Kingdom.
The introduction of the Cypriot pound was controversial from its inception in 1879 as technically the island was a province of the Ottoman Empire and the right to issue currency within the Ottoman Empire rested solely with the Ottoman Sultan. A question on the legality of introducing the pound in Cyprus was raised by the British Member of Parliament, Thomson Hankey, in the United Kingdom parliament in 1879, but concerns were dismissed by the British government, and they ceased to be an issue on the island following the annexation of Cyprus by Britain in 1914, in response to the Ottomans siding with the Central Powers in the First World War.
The British takeover of Cyprus in 1914 was not ratified by the new Republic of Turkey until the Treaty of Lausanne in 1923, but that agreement led to the creation of a full British colonial government in Cyprus in 1926, with the establishment of a local legislative council. The Council in turn established a Cyprus Currency Board in 1927 to oversee the issue of Cypriot pounds.
The Currency Board could issue notes and coins, initially denominated in the Cypriot pound, shillings and piastres, and later, following decimalization in 1955, in Cypriot pounds and mils. However, the Cypriot pound remained pegged at one Cypriot pound to one pound sterling meaning ultimate fiscal control still rested with the Bank of England in London and the Government of the United Kingdom. This link was maintained by the requirement that for every Cypriot pound issued by the Currency Board in Cyprus, one pound sterling issued by the Bank of England had to be deposited by the Government of Cyprus with the Crown Agents in London.
Decimalisation.
In 1955, the British colonial authorities decimalised the Cypriot pound, using the system proposed in 1855 by Sir William Brown, a member of the United Kingdom parliament, that the pound sterling in the United Kingdom should be divided into 1000 parts, each called a mil (rather than 960 farthings). Although this system was never adopted in the United Kingdom, it was used in several British colonies, including Hong Kong from 1863 to 1866, and the British Mandate of Palestine from 1927 until 1948. This latter example may have been the impetus to use a pound-mil system in Cyprus as the Palestine pound was for a brief period accepted as legal tender in Cyprus.
The Cypriot pound was decimalised in 1955 with 1,000 "mils" ("μιλς", "mil") to the pound. Colloquially, the 5-mil coin was known as a "piastre" (not an exact equivalence; the piastre was equal to mils) and the 50-mil coin as a "shilling" (an exact equivalence).
The subdivision was changed to 100 "cents" ("σεντ", "sent") to the pound on 3 October 1983. At that time, the smallest coin still in circulation was that of 5 mils. This was renamed as cent, but soon was abolished. Mil-denominated coins are no longer legal tender.
Towards the end of the Cypriot pound era, some cashiers omitted the 1- and 2-cent coins from the change they gave. Owner-operated businesses often rounded down the net amount to be paid to the nearest multiple of 5 cents.
Towards the euro.
The Cypriot pound was replaced by the euro on 1 January 2008. The currency entered the Exchange Rate Mechanism II on 2 May 2005 and it was limited within the band of CYP 0.585274 ±15% per euro. A formal application to adopt the euro was submitted on 13 February 2007. On May 16, 2007, Cyprus, along with Malta, received the European Commission's approval for this and was confirmed by the European Parliament on 20 June 2007 and the EU leaders on 21 June 2007. The permanent exchange rate, EUR 1.00 = CYP 0.585274, was decided by the EU Finance Ministers on 10 July 2007. From 12 July 2007 to 5 December 2007, the exchange rate remained at 0.5842. Since 7 December 2007, the rate has been fixed at the irrevocable rate, € = £0.585274.
In summer 2006, the Bank of Cyprus started including on its statements the indicative balance in euros. The Cyprus Telecommunications Authority followed suit with its bills two months later. A small number of shops also showed indicative euro totals on their receipts. By late autumn 2006, the number of banks and shops offering indicative euro equivalents on their statements and pricing had increased significantly.
Euro changeover.
The Cypriot pound was replaced by the euro as official currency of the Republic of Cyprus on 1 January 2008 at the irrevocable fixed exchange rate of CYP 0.585274 = €1. However, pound banknotes and coins continued to have legal tender status and were accepted for cash payments until 31 January 2008. Cypriot pounds were convertible free of charge at Cypriot credit institutions until 30 June 2008. CYP coins were convertible at the Central Bank of Cyprus until 31 December 2009 and CYP banknotes were convertible until 31 December 2017.
For a wider history surrounding currency in the region, see The History of British Currency in the Middle East.
Coins.
Predecimal.
In 1879, copper coins were introduced in denominations of , , and 1 piastre. The Greek-Cypriots called the first of these coins the δεκάρα ("dekara"—from the Greek word "deka" that means ten), referring to its equivalence to 10 para. The Greek name for the -piastre coin was εικοσάρα ("ikosara"—from the Greek "ikosi" that means twenty). These coins were followed, in 1901, by silver 3, , 9 and 18 piastres, the last two being equal to 1 and 2 shillings. The 3 piastres was only issued that year. The piastre was last struck in 1926. In 1934, scalloped-shaped and 1 piastre coins were introduced struck in cupro-nickel, changing to bronze in 1942. In 1947, cupro-nickel 1 and 2 shillings replaced the silver coins. The last piastre and shilling coins were issued in 1949.
Decimal - mils.
In 1955, 3, 5, 25, 50 and 100-mil coins were introduced, with the lowest two struck in bronze and the others in cupro-nickel. In 1963, dodecagonal, aluminium 1 mil coins were introduced, following the discontinuation of the 3 mil coin. Dodecagonal, aluminium 5 mil coins were introduced in 1981.
Decimal - cents.
In 1983, coins were introduced for , 1, 2, 5, 10 and 20 cents, with the cent the same size and composition as the earlier 5 mil coins. The other coins were struck in nickel-brass. The cent was only struck in 1983. In 1991, cupronickel, Reuleaux heptagonal (curved-equilateral-heptagonal) 50-cent coins were introduced.
Banknotes.
Predecimal.
In 1914, the government issued emergency notes in denominations of 10 shillings, and 1 and 5 pounds. Regular type notes were issued from 1917 and on. Notes for 5 and 10 shillings, and 1 and 10 pounds were introduced that year, followed by 1 and 2 shillings in 1920 and 5 pounds in 1926. Denominations below 10 shillings were not issued after 1920 but were reintroduced in 1939, with 3 piastres issued between 1943 and 1944. The 1 and 2-shilling notes were replaced by new coins in 1947.
Decimal - mils.
In 1955, the 5 and 10 shillings notes were replaced by 250 and 500-mil notes. The Central Bank of Cyprus was established in 1963 as an autonomous institution in accordance with the Central Bank of Cyprus Law 1963 and the relevant articles of the constitution. It began issuing paper money in 1964, and introduced 10-pound notes in 1977. Notes for 250 mils ceased production in 1982, shortly before the cent was introduced.
Decimal - cents.
On 3 October 1983, 50-cent notes replaced the 500-mil notes, with 20-pound notes added in 1992.
The last set of banknotes in use were:
The 1992/1993 version of the £20 note was almost identical to the latest one in terms of design. However, it is often considered part of the 1987–1992 series despite the apparent look and feel difference. And like the rest of the 1987–1992 series, the 1992/1993 £20 note was officially withdrawn by the Central Bank a few years before the adoption of the euro.