Banks agree lending rates need to be reduced gradually

Representatives of credit institutions agreed on Friday to the need for a gradual reduction in lending rates and on reducing costs associated with the restructuring of loans.

During a meeting Friday with Central Bank of Cyprus (CBC) Governor Panicos Demetriades credit institutions committed themselves to taking concrete steps towards this goal.

Data provided by the ECB for August showed that despite a dramatic drop in deposits in Cyprus borrowing has become more expensive.

The data indicated that a significant reduction in deposit interest to 2.0 per cent has not brought about any reduction in lending costs.

The ECB reported that interest rates for business loans had increased to 6.5 per cent in July compared with 6.35 per cent in June – the highest in the eurozone.

Interest rates for business loans in Cyprus were almost 3.5 per cent higher than the eurozone average of 3.3 per cent.

And rates on housing loans went up from 5.37 per cent in June 2013 to 5.6 per cent by July.

By comparison, the average interest rate for housing loans in the eurozone was 3.28 per cent.

 

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.