Cyprus official interest rates remain unchanged

Cyprus Monetary Policy Committee (MPC) decided unanimously to leave the official interest rates of the Central Bank unchanged.
The official interest rates of the Central Bank of Cyprus, 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 remain unchanged at 4,50%, 4,75% and 2,75%, respectively.
Central Bank Governor Christodoulos Christodoulou said that international and domestic developments have not substantially changed since the last meeting of the MPC on 23 February 2007,
so as to warrant at this juncture a change in domestic interest rates.
He said that the global economy is continuing to exhibit robust growth with inflation hovering at relatively low levels.
He added that a similar picture can be drawn for the domestic front, with decelerating inflation and satisfactory growth rates. In particular, domestic inflation receded to 1,49% in March compared with 3,23% in the same month of 2006.
For the first quarter of 2007, inflation reached 1,53% compared with 2,72% in the corresponding period of 2006. Despite the significant inflation deceleration, the MPC expressed its concern about the sizeable expansion of money supply and credit to the private sector, which contribute to the widening of the trade deficit.
The MPC, taking into account all the above as well as the fact that most of the major central banks maintained their interest rates unchanged at their recent meetings, decided, unanimously, to adopt a wait-and-see stance at this juncture, leaving the official interest rates of the Central Bank of Cyprus unchanged, a Central Bank press release said.

Christodoulou also revealed that he will not seek a renewal of his term in office and since February has tendered in his resignation to President Papadopoulos.