You are here

“Burning” rates on the businesses

02/12/2010 12:52
The cost of money for the Cypriot businesses climbed to a 14-month high in October. The crisis forced banks to become more and more demanding in relation to the risk they take for lending and the terms for the businessmen have become stricter.

The European Central Bank data released today show the upward trend that the interest rates for business loans follow in the past few months, which hit a record high last seen in August 2009.

According to latest figures, the interest rates for business loans in Cyprus stood at 6.11% from 6.04% in September and 6.01% in October 2009.

In Greece, where entrepreneurship entails the country’s risk, the interest rate of the business loans stood at 5.09%, 102 base points lower than the charge to the Cypriot businesses.

In the euro area, the interest rate for the business loans stood at 3.39% in October against 3.37% in September 2010.

The uncertain economic environment and the entailed risk in lending is transferred to the businesses only at the current stage, since the households were benefited by the slight drop in the rates of housing loans, while the deposit rates remained at the same level as in the previous months.

As for the housing loans, the interest rates declined to 4.71% from 4.77% in September and 5.17% in October 2009.

In the euro area, the housing rate dropped to 3.61% from 3.62%. In Greece, it reached 4.12%.

The deposit rates showed stabilization. In October, they stood at 3.96% - as in September – against 4.15% in October 2009.

In the euro area, the average deposit rates for bills of up to one tear rose to 2.35% from 2.2% in September.

The cost of money in Greece increased too. The average rate for new bills increased to 3.67% from 3.59%, denying expectations for a drop in the cost of money.