Interest rates

The Turkish Central Bank is expected to start the easing cycle this week after keeping the key policy rate steady for eight months.

Most economists surveyed by state-run Anadolu Agency forecast that the bank would slash its policy rate by 150 basis points from the current 50 percent.

Interest rates for some 400,000 housing loans concluded with a floating rate and whose installments had frozen at the levels of May 2023, when the European Central Bank's interest rate was at 3.5% and the 3-month Euribor at 3%, are now free to decline.

Banks in Cyprus raised the interest rates on home loans in August, while reducing the interest rates offered on household deposits, according to data released by the Central Bank of Cyprus on Wednesday. At the same time, the amount of new loans issued in August saw a sharp decline, dropping by nearly a third compared to July.

The U.S. Federal Reserve cut its key lending rate by half a percentage-point Wednesday in its first reduction for more than four years, sharply lowering borrowing costs shortly before November's presidential election.

Bank of Cyprus is lowering the reference interest rate on loans linked to the European Central Bank's (ECB) base rate, effective this Wednesday. The rate will drop from 4.25% to 3.65%, following the ECB's recent interest rate reductions.

As widely expected, the Central Bank has kept its main policy rate, the one-week repo auction rate, unchanged at 50 percent for a fifth straight month.

By 25 basis points, as expected, the interest rate cut - The downward cycle for borrowing costs begins - ECB announcement in detail

The de-escalation of lending rates, but also of interest rates on deposits by commercial banks, is expected to be slow, as banks await the next moves by the European Central Bank to determine their pricing policy.

Cypriot banks are maintaining a low profile, but 2024 will likely bring higher profits than the record-breaking figures of 2023.

Interest rates for deposits by households and corporations in Cyprus converged and matched in March, from having a spread of 55 basis points in February, according to data released by the Central Bank of Cyprus.