Interest rate margins under pressure

Latest European Central Bank data show a slight decrease in lending rates, while deposit rates rose due to increasing competition for the absorbance of new deposits.

According to new ECB data, interest rates on housing loans in Cyprus fell to 5.20% in August from 5.51% in July and 5.46% in August 2011. This is the second consecutive decline on a monthly basis.

In the euro area, the interest rate on housing loans dropped to 3.48% from 3.58%.

Interest rate for new housing loans in Greece fell to 3.25% from 3.42%.

As for the business loans in Cyprus, they declined to 6.55% from 6.61% in July and 6.66% in August 2011. This is the lowest level since May 2011.

In Greece, the cost of borrowing is lower and interest rates on business loans fell marginally to 5.95% from 6.01%.

In the eurozone, they decreased to 3.48% from 3.53% in previous month.

Interest rates for new deposits in Cyprus stood at 4.43% in August from 4.41% in July and 4.13% in August 2011.

This is the highest level since March 2009.

In Greece, the cost of absorbance of deposits dropped to 4.54% from 4.82% in July.

In the eurozone, it declined to 2.66% from 2.80%.