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CBC publishes credit institutions’ interest rates for July 2024

by THEFUTURE.TEAM

September 11, 2024

The Central Bank of Cyprus (CBC) has released its latest report on the interest rates offered by credit institutions across the country for July 2024, shedding light on the economic landscape in a period marked by evolving global financial conditions. With interest rates playing a critical role in shaping the borrowing and investment behaviour of businesses and individuals, these figures offer valuable insights into the health of the Cypriot economy.

According to the CBC’s data, interest rates on deposits remained relatively stable compared to previous months. The interest rate for new deposits with a maturity of up to one year held at an average of 0.82%, while overnight deposits for households saw a marginal decline, reaching 0.04%. This slight decrease in overnight deposit rates reflects the broader market’s conservative approach to short-term liquidity, a common trend as economic uncertainty continues to weigh on the eurozone.

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For businesses, the rates on overnight deposits remained flat, standing at 0.00%, underscoring the low-yield environment that has persisted for much of the year. This pattern aligns with European Central Bank (ECB) policies, which have kept interest rates subdued to manage inflationary pressures while stimulating investment. As a result, businesses and investors are navigating a challenging environment where low interest rates offer limited returns on traditional savings, potentially pushing them toward riskier, higher-yield investments.

On the lending side, the CBC’s report highlights a slight increase in interest rates for new loans. The interest rate for loans to households for consumer credit increased to 5.80%, up from the previous month’s figure of 5.69%. Meanwhile, loans for house purchases were offered at an average rate of 4.34%, a modest rise compared to June. This uptick, while not dramatic, signals potential concerns around inflationary trends and the cost of borrowing for households.

For businesses, the lending environment remained dynamic, with rates for loans up to €1 million rising to 5.74%. This upward movement reflects broader economic shifts, as businesses face higher borrowing costs in the wake of inflation and tightening global financial conditions.

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Industry Uproar Over Reduction in Electric Vehicle Subsidies

by News Editor

April 26, 2025

The recent move by the government to curtail subsidies for electric vehicles has stirred significant discontent among car importers in Cyprus. The Department of Road Transport (DRT) has slashed available grants under the Electric Vehicle Promotion Scheme as of April 23, leading to a rapid depletion of the subsidy pool and leaving many potential applicants disappointed.

Importers’ Concerns

According to the Cyprus Motor Vehicle Importers Association (CMVIA), the lack of transparency and failure to engage stakeholders prior to the decision have eroded trust in the government’s commitments. Importers now find themselves facing a precarious situation, with substantial stocks of electric vehicles and mounting promotional expenditures.

Public Interest and EU Compliance

Although the scheme aimed to support the transition to zero-emission transport until 2025, the DRT states that the curtailing of funds was necessary to comply with European funding terms, which warned against delays in vehicle deliveries. This decision has fueled market uncertainty despite the application portal experiencing dynamic changes.

Industry’s Ongoing Demand

The CMVIA refutes any claims suggesting waning interest in electric vehicles, underscoring the rapid exhaustion of available grants as proof of substantial demand. They highlight the importance of meeting Cyprus’s green transition targets, including putting 80,000 electric vehicles on roads by 2030.

While the total budget for subsidies saw an increase to €36.5 million in 2023, thanks to additional funding, ongoing difficulties in timely vehicle distribution have led to premature closures of applications. In response, CMVIA has called for urgent dialogue with the Minister of Transport to reassess the decision, fearing that it could endanger the future of e-mobility in Cyprus.