According to the latest report published by the Central Bank of Cyprus, net new loans in Cyprus experienced a notable decline in November 2025. The total net new loans dropped to €256.3 million from overall new loans of €565.2 million, compared with €429.4 million from total new loans of €624.9 million in the preceding month.
Detailed Financial And Statistical Overview
The report also provided comprehensive statistical data on average interest rates imposed by monetary financial institutions in Cyprus for deposits and loans denominated in euros for euro area residents. The analysis includes updated metrics for new lending volumes in November 2025 and offers a detailed breakdown across various lending categories.
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Key Developments In Interest Rates
Recent adjustments in interest rates were evident across several loan and deposit categories. Notable changes include:
- The interest rate on household time deposits up to one year increased to 1.13% from 1.07%.
- Deposits from non-financial corporations declined from 1.23% to 1.17%.
- Consumer loan rates rose to 6.95% from 6.88%, while home purchase loan rates edged up from 3.73% to 3.86%.
- Rates for loans to non-financial corporations showed stability at 4.39% for amounts up to €1 million, but loans exceeding €1 million saw rates increase to 4.50%, reflecting a higher risk premium.
The analysis also emphasized that shifts within the mortgage loan portfolio—encompassing primary residences and vacation homes with diverse risk profiles—affect the weighted average interest rate regardless of isolated rate changes at individual banks.
Comparative Perspectives And Market Implications
The publication, part of the Monetary and Financial Statistics series for December 2025, offers comparative insights through parallel data available on the European Central Bank Data Portal. Specifically, it notes that while interest rates on outstanding loans in Cyprus align closely with the euro area median, deposit rates in Cyprus are markedly lower. This disparity is attributed primarily to high bank liquidity and the relatively small size of Cyprus’s banking market.
Liquidity And Deposit Dynamics
Even as new loan interest rates in Cyprus are competitive with the euro area norms, deposit interest rates remain the lowest in the region. With a Liquidity Coverage Ratio reaching 319% in November 2025—significantly higher than the EU median—the report indicates that such elevated liquidity levels are instrumental in determining the low deposit rates.
Conclusion
The Central Bank of Cyprus’s findings for November 2025 highlight a cautious lending environment accompanied by modest adjustments in key interest rates. As both household and corporate segments navigate this financial landscape, the interplay between high liquidity and market size continues to drive deposit rate disparities across the euro area.
