Fuel Prices Set To Rise As Middle East Tensions Increase

Fuel prices in Cyprus are expected to increase at service stations over the next 10 days as geopolitical tensions in the Middle East affect international energy markets. Higher wholesale costs are beginning to filter through to retail pricing.

Supply Costs On The Rise

Savas Prokopiou, President of the Cyprus Fuel Station Owners Association, said fuel procurement costs for station operators have increased by approximately 10–12% since Friday.

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Retail prices are expected to adjust gradually as existing fuel stocks are replaced with higher-priced supplies. Prokopiou noted that the current increase remains more moderate than the sharp price spikes seen at the start of the Russia–Ukraine conflict in 2022.

Gradual Increases With Broader Implications

Over the past 15–20 days, wholesale prices have already risen by around 10%, with the latest geopolitical developments pushing increases to the 10–12% range. The trend reflects the sensitivity of fuel markets to disruptions affecting global oil supply and transport routes.

Market Outlook And Strategic Considerations

Prokopiou said current international crude prices remain below the extreme levels seen during previous energy shocks. According to his assessment, keeping oil prices below $80 per barrel would help limit further increases at the retail level. Market developments in the coming weeks will determine whether the recent price pressures persist or stabilize.

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Cyprus Central Bank Reports Sharp Decline In New Loans For January 2026

by THEFUTURE.TEAM

March 8, 2026

Overview Of Lending Trends

The Central Bank of Cyprus (CBC) reported a marked downturn in total net new loans for January 2026. The figures reveal a decline of €377.7 million in net new loans compared with the previous month, reflecting broader adjustments in both consumer and housing credit markets.

Detailed Lending Activity

Net new loans in January totaled €247.3 million, based on €495.9 million in total new lending. In December 2025, net new loans reached €625.0 million from €986.9 million in total lending. Changes were recorded across several credit categories. Net new consumer loans increased slightly to €18.9 million from €17.2 million in December. Housing loans declined to €95.7 million from €135.4 million in the previous month.

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Interest Rate Movements

Interest rates for both consumer and housing loans declined slightly during the period. Consumer loan rates fell to 7.20% from 7.22%, while housing loan rates decreased to 3.70% from 3.78%. Deposit rates showed limited changes. Household term deposits remained at 1.20%, while deposits from non-financial corporations increased to 1.34% from 1.27%.

Comparative European Context

In comparison with other euro area countries, lending rates in Cyprus are close to the median for outstanding loan balances. Margins for households are around 0%, while margins for non-financial corporations stand at approximately 0.4%. The transmission of monetary policy in Cyprus broadly follows developments in the wider euro area, particularly during periods of monetary tightening or easing. However, the pass-through of rate changes to new loans, especially those issued to non-financial corporations, appears lower than in some other euro area markets.

Shifts In Borrower Behavior And Market Dynamics

The CBC report also highlights changes in borrower preferences regarding interest rate structures. The share of new housing loans with variable interest rates has declined from nearly 100% in early 2022 to 11.6%. Fixed-rate loans have become more common in new housing lending, although many of these products later transition to variable rates.

Banking Liquidity And Deposit Rates

In addition to lending trends, the Central Bank of Cyprus noted that deposit rates in Cyprus remain among the lowest in the euro area. High liquidity levels within the banking system contribute to this trend. Cypriot banks reported a liquidity coverage ratio of 319% in December 2025, compared with a euro area median of 192% and an EU average of 161%. These liquidity levels influence the pricing of deposits in the domestic market. Changes in policy interest rates have also shown limited pass-through to new deposits, reflecting the structure of Cyprus’s relatively small banking sector. The CBC report highlights ongoing developments in both lending and deposit conditions within the country’s banking system as economic conditions and borrowing preferences continue to evolve.

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