The Republic of Cyprus’ strategic location has attracted settlers of Mycenaean Greek origin, major and powerful empires like the Assyrians, Persians, and Egyptians. Lying in the Eastern Mediterranean, this island nation is surrounded by Turkey, Syria, Lebanon, the Gaza Strip, Israel, and Greece. The country was ruled by the Ottoman Empire for more than 300 years. In 1878, Cyprus was also under the British administration.
The market economy of Cyprus is mainly based on service, financial services, tourism, and real estate. Over the past decade, the country’s growth rate hasn’t been consistent as its profitability depended on its political status as well as Western Europe’s financial state. Despite its erratic growth, Cyprus’ growth rate is way above the average as compared to some EU member states. In 2005, the country became a member of the European Exchange Rate Mechanism. Austerity measure was implemented by the government which helped the country turn its fiscal deficit into a surplus in 2008, resulting in its inflation to decrease to 4.7%.
With the construction and tourism industries slacking off due to the global recession, the country’s economy started to slow down in 2009. It was hard for Cyprus to bounce back with only a 0.6% growth rate reported in 2010, not to mention the country’s increasing budget deficit which reached 5.3% of its GDP. Because of the drop in its finances, the nation’s capital city, Nicosia, has come up with cost-cutting measures for its state payroll and an improved structure on social benefits.
Before Cyprus moved to the eurozone in January 2008, it used the Cypriot pound for its legal tender. The pound was introduced by the British government in 1879 at the same rate as the UK pound sterling. It was also equivalent to 180 Turkish piastres. A family of banknotes produced by Thomas De La Rue was released on December 2, 1914.
When the country had a limited supply of coinage in 1919, government-run printers in Nicosia had to stamp with cancellation on the front design of remaining stock of 1918 5-shilling banknotes. The back design was printed with new text before they were cut into three, making three 1-shilling banknotes.
The death of King George V on January 20, 1936, and the enthronement of King George VI led the government of Cyprus to issue a new family of banknotes. These notes bear the coronation date to commemorate the coronation of the new king.
The government had a printing order for 5-shilling banknotes that bear modern Turkish characters before the death of King George VI on February 6, 1952. Since Bradbury, Wilkinson, & Company had already printed half a million banknotes carrying King George VI’s portrait and the date of his reign, the other 500,000 banknotes bear Queen Elizabeth II’s picture and the date of her reign.
On August 16, 1960, the country gained its freedom from the British, therefore, another set of notes was released. Although the color scheme was retained, these notes came with all-new designs. When the Central Bank of Cyprus was formed, another family of notes was introduced, bearing the name of the bank.
Between 1977 and 1985, the bank issued another set of notes. Several issues were introduced bearing the same color schemes but with improved and added security features such as watermark and security threads.