Money in Northern Cyprus

• Northern Cyprus uses the lira (lirasi), the official currency of Turkey. As of June 2009, the lira was allowed to float against other major currencies, including the U.S. dollar, British pound and the euro. All these major currencies, as well as the lira, are accepted in most shops, restaurants and hotels, while currencies can be exchanged at banks, some hotels, and small, private exchange offices. There is no limit to the amount of hard currency that can be brought into northern Cyprus.
  
  

Conversion to the Euro

• The Republic of Cyprus began converting to the euro in 2005, one year after the nation officially joined the European Union. The Cypriot pound was accepted along with the euro for two years until Dec. 31, 2007, when the euro was adopted as the nation's official currency. Many shops and restaurants also accept British pounds and U.S. dollars, but Turkish lira are not usually accepted for purchases.
  
  

Joining the EU

• Turkey has entered into negotiations to join the European Union, a process that will take several years to complete. Normally when a nation joins the EU, it also joins the European Exchange Rate Mechanism, subject to approval by a national referendum. Denmark and Great Britain are two countries that have not joined the eurozone. Its national currency is pegged in value to the euro for a period of time while the two currencies are used jointly and temporarily within its borders. Finally, the euro is fully adopted and the old currency taken out of circulation.
  
  

End of the Lira

• If the application to join the EU is successful, Turkish money will eventually be withdrawn from circulation and the euro will be adopted both on the mainland and in northern Cyprus as the official legal tender.
  
  

Reunification?

• Currency unification could smooth the way for eventual political reunification of the island, but that issue remains fraught with ancient ethnic rivalries that date to the original occupation of Cyprus by Turkey in the 16th century. Most southern Cypriots oppose reunification, while a majority in the north support it.