New quotation method of the exchange rates of the Cyprus pound against foreign currencies

In the context of the preparation for the targeted participation of the Cyprus pound in the Exchange Rate Mechanism II (ERM II) after the accession of Cyprus to the European Union on 1st May, 2004, the Central Bank of Cyprus announces the implementation of a new quotation method of  the exchange rates of the Cyprus pound against foreign currencies.

In particular, according to the operational rules of the ERM II, the exchange rate against the euro of the currencies of the member countries of the European Union participating in the ERM II, shall be expressed as the units of the member country’s currency that correspond to one euro. The implementation of this method in the case of Cyprus means that the previous exchange rate quotation method, according to which the exchange rate of the euro against the Cyprus pound would determine the units of the euro that corresponded to one Cyprus pound (e.g. CYP1=1,7086 euros), has been replaced by the new quotation method according to which the exchange rate of the Cyprus pound against the euro determines the units of the Cyprus pound that correspond to one euro (e.g. EUR1=0,5853 Cyprus pounds).

Even though the obligation to adopt the new method concerns only the exchange rate of the Cyprus pound against the euro, the Central Bank of Cyprus has decided, for the sake of uniformity, to also apply the new quotation method against all other foreign currencies.

In order to illustrate the new method the following example presents an exchange rate bulletin of the exchange rates that were current on 13 February, 2004 using both methods.

*CYP per 100 Japanese Yen

The new quotation method of the exchange rates of the Cyprus pound against foreign currencies was put into effect on 5 April, 2004.