Keravnos wants lending rates contained

Cyprus’ Finance Minister, Makis Keravnos, has written letters to the director general of the Cyprus Banks Association and the director general of the Association of Credit Acquisition Companies and Credit Facility Managers, requesting measures to control rising lending rates for serviceable loans up to 350,000 euros.

In his letter to the director general of the Cyprus Banks Association, Keravnos acknowledged the banking sector’s important role in the economy and society, and stressed the ministry’s position to maintain the soundness of the Cyprus banking sector.

He highlighted the issue of inflation and the continuous increase in interest rates by the European Central Bank, which are creating financial difficulties for the middle class, and particularly those looking to buy or build their first homes.

Following constructive consultations with the banks and the Cyprus Banks Association, the minister proposed that the banks could absorb some of the increase in lending rates, with a minimal impact on the lenders themselves.

He specified that this proposal should only concern serviceable housing loans for building or buying a first home, with a maximum value of €350,000 and whose interest rate is variable.