Cyprus Table of Contents
The Central Bank of North Cyprus, the central bank of the "TRNC," was established by law in 1983 and began operation the next year. It performed the usual functions of a central bank, but did not issue a national currency. The Turkish lira was used instead. Establishment of a separate "TRNC" currency was occasionally discussed, but concrete action for this purpose had not been undertaken as of 1990. Foreign exchange was traded freely in the "TRNC," with no restrictions on transactions. A free currency exchange market was seen as part of a liberal economy. The government set interest rates as high as 40 percent for one-year deposits and 48 percent for some other deposits to prevent capital flight and shield deposits against the effects of chronic high inflation.
The central bank monitored the activities of about a dozen Turkish Cypriot banks and the branches of several Turkish banks active in the "TRNC." By the late 1980s, the largest commercial bank was the Türk Bankasi, followed by the Cyprus Credit Bank and the Cyprus Commercial Bank. The cooperative movement's bank, the Turkish Cypriot Cooperative Central Bank, was important to cooperative members throughout the "TRNC." The Muslim religious foundation Evkaf had its own bank, Kibris Vakiflar Bankasi, which managed the foundation's financial assets and the revenue accruing to it from its widespread and varied real estate holdings.
Data as of January 1991