Households one-year deposit rates in Cyprus decline below 1% for the first time

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

Deposits interest rates have been declining steadily in the context of the banks’ effort to reduce costs and prompted by the low interest environment by 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 rate for household deposits with up to one year notice amounted to 0.36% in June.

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

According to the CBC, the interest rate on loans for house purchase 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%.

The euro area average on rates for house purchase amounted to 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 Euros 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 Euros 1 million recorded a decrease to 2.91%, compared with 3.23% in the previous month.

Furthermore, according to the CBC, total new loans registered a decrease to Euros 313.0 million in June 2018, compared with Euros 348.6 million in the previous month.

New loans for consumption recorded a decrease to Euros 14.7 million, compared with Euros 19.2 million in the previous month.

New loans for house purchase fell to Euros 83.9 million, compared with Euros 105.7 million in the previous month.

New loans to non-financial corporations for amounts up to Euros 1 million decreased to Euros 48.9 million, compared with Euros 52.2 million in the previous month.

New loans to non-financial corporations for amounts over Euros 1 million registered a decrease to Euros 144.2 million, compared with Euros 155.8 million in the previous month, the CBC said.

Source: Cyprus News Agency