CYPRUS: One-year household deposit rates at lowest rate ever

Interest rates for household deposits with up to one-year notice dropped to 0.95% in June, declining to a new historic low, according to data released by the Central Bank of Cyprus.

Deposits rates have been declining steadily as Cyprus banks – burdened with bad loans – try to reduce costs, prompted by the low interest environment of the ECB which charges banks that deposit excessive liquidity.

According to the CBC figures, household deposit rates peaked at 6.03% in December 2008.

However, Cyprus is still above the Euro area average where interest rates for household deposits with up to one-year notice was 0.36% in June.

The respective interest rate payed by banks to companies rose by 10 basis points, from May reaching 0.75% in June.

The interest rate on loans for house buying fell to 2.38%, compared with 2.45% in the previous month, marking a reduction for three consecutive months. Including the annual percentage rate of charge, a borrower looking to purchase a house would pay 3.27% interest – double the European average.

The euro area average on rates for house purchases was 1.60% on June 6, 2018.

The interest rate on consumer credit rose to 3.91%, compared with 3.87% in the previous month, while the interest rate on loans to non-financial corporations for amounts up to €1 million increased to 3.62%, compared with 3.52% in the previous month.

The interest rate on loans to non-financial corporations for amounts over €1 million recorded a decrease to 2.91%, compared with 3.23% in the previous month.

New loans registered a decrease to €313.0 mln in June from €348.6 mln in the previous month.

New loans for consumption recorded a decrease to €14.7 mln down from €19.2 million in the previous month.

New loans for house purchases fell to €83.9 mln, compared with €105.7 mln in the previous month.