Cyprus’ borrowers were highly impacted in July following the European Central Bank’s decision to increase its benchmark deposit rate by 50 basis points to zero percent.
The move has ended an 11-year policy of historically low-interest rates in Cyprus and the Eurozone at large, Philenews reports.
At the same time, further rate hikes are most likely on the way – possibly as soon as next week in a bid by the ECB to control ever-rising inflation.
The Central Bank of Cyprus announced on Thursday that the interest rate on consumer loans increased to 3.27% in July, compared to 2.89% the previous month. This marks the highest level since February 2019 when it was 3.37% .
The interest rate on home equity loans rose to its highest level since February 2018 (2.61%), to 2.55%, compared to 2.32% the previous month.
And the interest rate for loans to companies, for amounts up to €1 million, recorded an increase to 3.51%, compared to 3.36% the previous month.