CBC Board to review a proposal aiming at reducing lending rates

Cyprus Central Bank Board of Directors will meet on Monday to review a proposal aiming at reducing lending rates in Cyprus.

Reliable sources told CNA it is highly likely the Central Bank will proceed with announcement of a interest rate reduction.

The proposal provides for a capital penalty to the commercial banks that offer interest rate margin of 2% over euribor on deposits. The proposal is along the lines of a 2013 CBC decision for imposing capital penalty to the banks offering a 3% interest margin over euribor.

The same sources said that Central Bank Governor Chrystalla Georghadji acquired the assurances of the commercial banks` CEOs that they will use the benefit stemming from the deposit rate reduction to reduce lending interest rate.

Georghadji met with the executive chiefs of the three Cypriot banks last Thursday. John Patrick Hourican, Bank of Cyprus Managing Director, said the bank endorses Georghadji`s proposal, while Bert Pijs, Hellenic Bank CEO noted the Bank will proceed with a 1% reduction of its base rate as soon as the Central Bank announces its final proposals.

Furthermore, the Cooperative sector already announced a 1% interest rate reduction on housing loans.

CNA

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.