The average interest rate on new loans to Cypriot households is now almost aligned with the eurozone median, while for businesses the margin stands at 0.24 per cent, according to the Central Bank of Cyprus (CBC).

At the same time, the CBC said that deposit interest rates in Cyprus for new deposits remain at the lowest level in the eurozone.

In its June 2025 bulletin titled “Cypriot Interest Rates in a European Context: Analysis and Comparison”, the CBC reported that the level of lending rates on outstanding loan balances in Cyprus is approaching the corresponding eurozone median.

The margin has narrowed to 0.09 per cent for households and 0.44 per cent for non-financial corporations.

Moreover, the level of interest rates on new loans in Cyprus is also comparable to the eurozone median.

Specifically, the CBC stated that the margin of the weighted average interest rate for new household loans is nearly in line with the eurozone median, while for businesses the respective margin is limited to just 0.24 per cent.

“The margin for businesses shows greater volatility compared to the eurozone median, possibly due to the smaller market spread, but remains at relatively comparable levels,” the central bank said.

In contrast to lending rates, the CBC explained that deposit interest rates in Cyprus are an outlier and are at the lowest level in the eurozone.

The central bank explained that this may be due to the high liquidity of Cypriot banks, which is among the highest in the eurozone.

For example, in December 2024, the Liquidity Coverage Ratio (LCR) in Cyprus stood at 333 per cent, compared to a eurozone median of 184 per cent and an average of 163 per cent.

It also cited the small size and scope of the Cypriot banking market as a contributing factor.

Regarding new deposits, the CBC found no difference between the low deposit rates for new accounts and the existing deposit portfolio.

“Deposit interest rates in Cyprus on new deposits continue to be at the lowest level in the eurozone, for the likely reasons mentioned above,” it added.

Finally, the CBC stated that for the purposes of this analysis, the median is considered a more appropriate benchmark since it is less sensitive to outliers, particularly due to the influence of countries with large portfolios.