Cyprus is preparing for one of the most important changes in its history. It is expected that on 1 January 2008 Cyprus will adopt the euro, the single european currency. More than 310 million people in the 13 EU member states that have adopted the euro now share the benefits of the single currency. The adoption of the euro will bring considerable benefits for the Cypriot citizen. Price transparency in the single market of the EU facilitates price comparability, fosters competition and leads to lower prices. The elimination of the exchange rate risk is conducive to trade transactions, thus also leading to lower prices. Travelling and buying goods and services in the euro area countries is easier, because citizens will not have the hassle of changing currencies every time they cross a border, and are better able to compare prices since they can use their own currency anywhere in the euro area. Travelling and buying goods and services outside the euro area is also easier, since the euro is an international currency and therefore widely accepted in many places outside the euro area, particularly in tourist destinations. Furthermore, both savers and investors can take advantage of increased opportunities for savings and investment, which emerge in the single financial market of the EU.
Moreover, there exist important potential benefits for the economy as a whole, such as price stability, sound public finances, low interest rates and a shield for negative shocks in the external environment. These conditions are conducive to bolstering economic growth, investment and employment, to the benefit of all citizens.







Sources: Central Bank of Cyprus

http://www.banknoteworld.com/countries/cyprus.html