Cyprus Finance Minister urges banks to lower interest rates

Finance Minister Charilaos Stavrakis has urged commercial banks to lower their interest rates on loans yet again to help relieve Cypriots during the economic crisis.

In statements on Sunday, the Minister also said there was no personal disagreement with Central Bank Governor Athanasios Orphanides but rather a difference of opinions.

“There should always be dialogue with the Central Bank and other institutions to obtain good performance for the economy. The estimations we have is that we have the highest rate of development in Europe, the second lowest levels of unemployment, which proofs that the economic policy of the government of Demetris Christofias is yielding results”, the Minister noted.

He said the Central Bank has made many suggestions on economic measures which the government could take, “many of which we fully agree with and other which we believe are not the right ones”, he added.

“The elected government bears the general responsibility of the economic management of the island and the Central Bank has a more restricted framework of structure, which is the health and supervision of the banking system. We want our banks to have a reasonable profitability especially during this difficult time they should intentionally lower their profits to take the burden off the Cypriot citizens”, the Minister said.

Stavrakis noted that to help the fluidity of the economy the government has taken a series of measures which have yielded results, significantly reducing the interest rates on deposits from 7% to 3.5% while the interest rate on loans have not been lowered by banks. “The banks unfortunately have not lowered in the same manner the interest rates on their loans, increasing their profits, something which cannot be acceptable at a time of economic crisis”, he added.

Stavrakis also said that the continued slowdown of the economy is bound to lead the unemployment levels upwards.