5 Cents – Cyprus

Following the Turkish invasion of 1974 and the subsequent de facto partition of the island, the currency situation in Cyprus by 1983 was one of formal unity masking profound political division. The Republic of Cyprus, internationally recognized and controlling the southern two-thirds of the island, continued to use the Cypriot pound (C£) as its sole legal tender. This currency, pegged to a basket of currencies and managed by the Central Bank of Cyprus in Nicosia, remained stable and was integral to the Greek Cypriot economy, which was beginning to recover and shift towards services and tourism.

In the north, the situation was radically different. After the self-declaration of the Turkish Republic of Northern Cyprus (TRNC) in November 1983, which was recognized only by Turkey, the area operated with a dual-currency system dominated by the Turkish lira. The Cypriot pound still circulated but was increasingly sidelined. Economic isolation, reliance on Turkish aid, and high inflation imported from Turkey created severe instability. This effectively cleaved the island into two separate monetary zones: a stable, internationally integrated south and an isolated, inflation-prone north.

Consequently, 1983 marked a point of no return in the island's monetary fragmentation. The political act of unilateral independence in the north cemented the economic divide that had been widening since 1974. While the Republic of Cyprus maintained a single official currency for the whole island de jure, the de facto reality was a bifurcated system, with the north progressively moving towards full monetary dependence on Turkey, a process that would culminate in the formal adoption of the Turkish lira in the following years.