Central Bank keeps rates steady

THE MONETARY Policy Committee yesterday decided to keep the key official interest rates of the Central Bank of Cyprus the same. The interest rates on the marginal lending facility (Lombard) and overnight deposit facility will remain at 5.5 per cent and 3.5 per cent respectively, said Central Bank Governor Christodoulos Christodoulou.

“The bank will remain in waiting and watching mode,” governor Christodoulos Christodoulou told reporters.

Christodoulou noted that international and domestic developments had not substantially changed since the Committee’s last meeting on September 3, requiring no change in interest rates for the moment.

However, international developments and the price of oil continued to be a cause for concern, he added.

Domestically, inflation dropped to 2.37 per cent compared to more than three per cent during the past two months, he noted.

The governor described the rate of economic growth this year as “satisfactory” and estimated a 3.5 per cent increase for the whole year.

The last rate adjustment in Cyprus was in April, when the Monetary Policy Committee raised rates a full percentage point to buffer the pound from speculation of a currency flight coinciding with Cyprus’s European Union membership last May 1.

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