Shifting Dynamics in Cyprus’ Loan and Deposit Rates
The financial landscape in Cyprus has seen notable fluctuations, as detailed in a recent report from the Central Bank of Cyprus (CBC). Consumer loan interest rates have experienced a slight uptick, with rates climbing to 6.19 percent from 6.17 percent in the preceding month. This increment, albeit marginal, contrasts with the movement in housing loan rates, which have taken a downward turn, settling at 4.75 percent from a previous 5.15 percent.
Meanwhile, the CBC’s report highlights a positive trend for savers, with household deposit rates on the rise. Interest rates for household time deposits with a maturity of up to one year have increased to 2.24 percent, marking a rise from 1.98 percent. Conversely, deposit rates from non-financial corporations have seen a decrease, dipping to 2.24 percent from 2.53 percent.
The broader lending market has also witnessed changes, with the total volume of new loans contracting by €79 million month-over-month. Specifically, new consumer loans fell to €22.2 million, with net new loans accounting for €20.5 million of this figure, down from €23.2 million in total new loans the month before.
In the housing sector, new loans also saw a decrease to €119.6 million, with net new loans making up €86.9 million, compared to €144.1 million in new housing loans the previous month. However, it wasn’t all downward trends; new loans to non-financial corporations for amounts up to €1 million rose to €69.3 million, with net new loans at €52.2 million, showing an increase from €57.3 million in total and €37.6 million in net new loans previously.
Contrastingly, larger corporate loans over €1 million experienced a decline, dropping to €270.8 million in new loans and €123.8 million in net new loans, from a higher €340.7 million in total and €124.4 million in net new loans the month prior.
The CBC’s report paints a complex picture of the current state of interest rates in Cyprus, reflecting an environment where savers are gaining slightly better returns on deposits while borrowers face mixed conditions depending on the purpose of their loans.
