Cyprus Central Bank reports interest rate shifts and lending contraction in August 2026

Data from the Central Bank of Cyprus for August 2026 indicates a notable increase in interest rates for household borrowing and specific deposit accounts. The interest rate for housing loans rose to 4.16% from 3.78% in July, while consumer loan rates climbed to 7.12% from 6.94%. Additionally, interest rates on household term deposits of up to one year increased to 1.35% from 1.27%, whereas rates for non-financial corporations remained steady at 1.56%.

Conversely, borrowing costs for businesses trended downward. Interest rates for non-financial corporations dropped to 4.45% for loans up to €1 million and to 3.67% for amounts exceeding €1 million, down from 4.47% and 4.29% respectively. The volume of lending also saw a contraction, with net new loans falling to €251.4 million compared to €415 million in July. The total value of new loans, including renegotiated contracts, reached €390.1 million, marking a decline from the €686.1 million recorded in the previous month.

Despite the August downturn, broader trends for the first eight months of 2026 show that credit expansion to households remains resilient, with total new housing loans reaching €1 billion during this period.