New figures from the European Central Bank show that borrowing costs for businesses across the euro area rose in June, while mortgage rates remained broadly stable. The composite cost-of-borrowing indicator for new corporate loans increased by 15 basis points to 3.79 per cent, while the indicator for new housing loans was unchanged at 3.51 per cent.
Banks in the euro area also raised deposit rates. The composite rate on new fixed-term corporate deposits rose by 17 basis points to 2.21 per cent, and the rate on new household fixed-term deposits climbed 13 basis points to 2.09 per cent.
In Cyprus, the Central Bank of Cyprus reported that deposit rates increased in June but remain well below eurozone levels. The rate on household deposits with maturity up to one year rose to 1.42 per cent from 1.25 per cent in May, while the rate for non-financial corporations increased to 1.41 per cent from 1.31 per cent.
The CBC attributed the weak pass-through to structural factors, including high liquidity. Cyprus's Liquidity Coverage Ratio stood at 310 per cent in June, compared with a European Union median of 189 per cent, reducing competitive pressure on banks to raise deposit rates.
Lending rates in Cyprus remain broadly aligned with the euro area. Mortgage rates edged down to 4.04 per cent from 4.06 per cent, while business borrowing costs rose. Pure new lending reached €626.20 million in June, up from €361.90 million in May, driven by loans exceeding €1 million.
Source: cyprus-mail.com
