05/01/2012 06:25
The cost of money fell slightly in late 2011, despite the changes that the European Central Bank tried to make on the interest rate environment.
According to latest ECB data, businesses and households continue to pay one of the most expensive business and housing loans in the euro area, despite the ECB rate cut by 25 base points in November.
The main reason is the cost of deposits that continues to go up – although marginally – due to the internal and external liquidity pressures on the banking system.
In a period that cheap money is necessary, businessmen in Cyprus continue to borrow with the highest cost in the euro area.
The interest rates of the new business loans in Cyprus in November 2011 fell for the first time since March 2010 but are still exceptionally high.
They dropped to 6.75% from 6.78% in October and 6.15% in November 2010.
The cost of borrowing for the Cypriot businesses is higher than that in Greece, where the macroeconomic conditions are much worse. In Greece, the interest rates for the new business loans also declined to 6.26% from 6.29%.
In the euro area, it stood at 3.88% against 3.87% in October 2011.
The rate cuts by the European Central Bank had only a slight impact on the housing loan rates.
The salary cuts and unemployment forced banks to be more cautious in granting housing loans.
Specifically, the interest rates of the housing loans fell to 5.53% from 5.61% in October and 4.89% in November 2010. It is the first cut since March 2011.
In the euro area, it increased to 3.96% from 3.95%.
As for the bailout countries, the housing credit remains cheap. In Greece, the new housing loans are granted with an interest rate of 4.74% and in Portugal with 5.34%.
At the current stage, however, the pressures on the Greek rates have not been transferred fully to Cyprus.
The interest rates for new deposits in Cyprus stood at 4.17% from 4.15% in October and 3.97% in November 2010.
In Greece, the cost of absorbance of deposits reached 4.61% against 4.49% in October and is the highest in the euro area.
In the eurozone, the average deposit rates for bills of up to a year fell to 2.78% from 2.88%.
According to latest ECB data, businesses and households continue to pay one of the most expensive business and housing loans in the euro area, despite the ECB rate cut by 25 base points in November.
The main reason is the cost of deposits that continues to go up – although marginally – due to the internal and external liquidity pressures on the banking system. In a period that cheap money is necessary, businessmen in Cyprus continue to borrow with the highest cost in the euro area.
The interest rates of the new business loans in Cyprus in November 2011 fell for the first time since March 2010 but are still exceptionally high.
They dropped to 6.75% from 6.78% in October and 6.15% in November 2010.
The cost of borrowing for the Cypriot businesses is higher than that in Greece, where the macroeconomic conditions are much worse. In Greece, the interest rates for the new business loans also declined to 6.26% from 6.29%.
In the euro area, it stood at 3.88% against 3.87% in October 2011.
The rate cuts by the European Central Bank had only a slight impact on the housing loan rates.
The salary cuts and unemployment forced banks to be more cautious in granting housing loans.
Specifically, the interest rates of the housing loans fell to 5.53% from 5.61% in October and 4.89% in November 2010. It is the first cut since March 2011. In the euro area, it increased to 3.96% from 3.95%.
As for the bailout countries, the housing credit remains cheap. In Greece, the new housing loans are granted with an interest rate of 4.74% and in Portugal with 5.34%.
At the current stage, however, the pressures on the Greek rates have not been transferred fully to Cyprus.
The interest rates for new deposits in Cyprus stood at 4.17% from 4.15% in October and 3.97% in November 2010.
In Greece, the cost of absorbance of deposits reached 4.61% against 4.49% in October and is the highest in the euro area.
In the eurozone, the average deposit rates for bills of up to a year fell to 2.78% from 2.88%.
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