Cyprus interest rates remain unchanged

Cyprus Central Bank Monetary Policy Committee (MPC) in its fist meeting for 2007 decided to maintain Cyprus‘ official interest rates, that is the minimum bid rate on the main refinancing operations, the interest rate on the marginal lending facility and the interest rate on the overnight deposit facility at 4,50%, 4,50% and 2,50%, respectively.

Central Bank Governor Christodoulos Christodoulou said ”that international and domestic developments have not substantially changed since its last meeting on 1 December 2006, so as to warrant at this juncture a change in domestic interest rates.”

According to Christodoulou, international developments, the global economy, supported by, among other things, the downward trend in energy prices, are continuing to grow at a satisfactory pace, while the MPC continues to observe the domestic front, both as regards economic activity and prices.

”The concerns of the MPC remain focused on the sizeable expansion of money supply and credit to the private sector, which contribute to the widening of the trade deficit”, he added, noting that ”the MPC, taking into account all the above, unanimously decided to adopt a wait-and-see stance at this juncture, leaving the official interest rates of the Central Bank of Cyprus unchanged.”