Cyprus And Hong Kong Sign Double Taxation Agreement

Cyprus and the Hong Kong Special Administrative Region of the People’s Republic of China have signed a double taxation agreement to eliminate double taxation on income and strengthen efforts to combat tax evasion and avoidance. Signed on June 12, 2026, in Hong Kong, the agreement was formalized by Cyprus Ambassador Koula Sofianou, accompanied by Acting Consul Harindarpal Singh Banga, and Hong Kong Secretary for Financial Services and the Treasury Christopher Hui.

Modern Tax Collaboration Framework

According to Cyprus’ Ministry of Finance, the agreement establishes a framework for tax cooperation intended to facilitate business activity and support investment and trade between the two jurisdictions. Clear rules governing cross-border transactions are expected to reduce the tax burden on businesses and individuals while limiting opportunities for tax evasion and avoidance.

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Provisions included in the treaty also provide for the exchange of tax information and establish procedures for resolving tax disputes, offering greater certainty to investors and companies operating in both markets.

Enhancing Economic Alliances

Efforts to strengthen economic and financial relations are reflected in the new agreement between the two jurisdictions. Recognized as one of the world’s leading financial centres, Hong Kong plays an important role in international trade and investment. Closer commercial ties and expanded opportunities for businesses operating across both markets are among the expected benefits of the treaty. Broader international efforts to promote tax transparency and strengthen cooperation between tax authorities also form part of the agreement’s objectives.

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ECB Raises Deposit Facility Rate For First Time In Nearly Two Years

by THEFUTURE.TEAM

June 15, 2026

Economic Shift: ECB Reverses Years Of Declining Rates

The European Central Bank (ECB) confirmed its first interest rate increase in nearly two years, raising the deposit facility rate in response to inflationary pressures and geopolitical uncertainty. Marking a shift in monetary policy, the move follows a period of rate cuts aimed at supporting economic activity and easing financing conditions.

Reevaluation Of Bank Liquidity Strategies

Although the immediate impact will be felt by only part of the borrowing market, the decision carries broader implications for banks. During the period of lower rates, banks maintained significant amounts of excess liquidity with the ECB as returns on these funds declined alongside deposit rates. With the deposit facility rate increasing by 0.25 percentage points to 2.25% from 2.00%, returns on surplus liquidity are expected to improve.

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Higher interest rates, however, could also increase borrowing costs and influence lending conditions across the banking sector.

Transitioning Investment Approaches And Market Dynamics

Banks had already begun diversifying the use of excess liquidity through investments in bonds and by expanding lending activities.

Successive reductions in the deposit facility rate from 3.00% at the end of 2024 through four consecutive cuts in early 2025 reflected a more accommodative policy stance as inflation pressures moderated.

Sectoral Impact And Future Outlook

Data from the ECB’s 2025 monetary policy report show that liquidity in the Cypriot banking system declined from €19.2 billion at the end of 2024 to €18.6 billion by the close of 2025. Despite the reduction, liquidity levels remained elevated. Outstanding loans increased from €27.6 billion to €31.7 billion, while deposits recorded a slight decline. Customer deposits continued to account for the vast majority of funding. By the fourth quarter of 2025, they represented 95% of total liabilities, highlighting their importance as the banking sector’s primary source of financing.

Changes in ECB rates are expected to influence how banks manage liquidity and allocate capital as monetary conditions evolve.

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