Cyprus has by far the highest interest rates in the Eurozone

Cyprus has by far the highest interest rates in the Eurozone

 

Review Hari Stefanatos

The highest by far in the Eurozone remained the interest rates on new loans to businesses and housing market offered in Cyprus, for the month June 2014, despite the downward trend shown in recent months, according to data released on Thursday by the European Central Bank (ECB) and the Central Bank of Cyprus (CBC).

However, most categories of lending rates to households dropped, according to the CBC, with the interest rate on consumer loans dropping to 5.74%, compared to 6.06% in the previous month. This is the lowest level since at least 2009, according to data available from CBC.

In contrast, the interest rate on loans for house purchase rose in June 2014 to 4.40% compared with 4.37% in the previous month, still the highest among the countries of the Eurozone. The second highest rate loan for house purchase in the euro is Slovakia with 3.36%, according to data from the ECB, and lowest in Finland with 1.83%.

Further drops were also recorded in June 2014 in the main categories of interest loans to businesses.

The interest rate on business loans for amounts in excess of EUR 1mln dropped to 5.50% compared to 5.55% in the previous month, but are still the highest among the countries of the Eurozone. The second highest rate is in Greece with 4.56% and the lowest in Luxembourg with 1.42%.

Cyrpus has also the highest interest rates in the Eurozone for business loans for amounts below EUR 1mln, which stands at 6.02% compared with 6.14% in the previous month. The second highest rate in the Eurozone is Portugal with 5.58% and the lowest in Luxembourg with 2.12%.

Deposits Interest Rates

The interest rate on deposits of up to one year from households increased in June 2014 to its highest level since April 2013, to 2.56% compared with 2.49% in the previous month. This is the highest deposit rate for households in the Eurozone, with the second highest rate is that of Greece with 2.36%.

In contrast, the corresponding deposit rate for companies declined to 2.39% compared to 2.50% in the previous month and is the second highest rate in the Eurozone after the 2.40% deposit rate in Greece.