Cyprus lending rates will soon come down, says governor
The governor of the central bank of Cyprus, Athanasios Orphanides, has said that Interest rates may take a fall sooner than expected as the country tries to improve economic risks.
This drop may be a good thing as the house markets would improve after struggling with the continued increases of interest rates and therefore repayments.
Mr. Athanasios Orphanides said that it would be wise to look for alternative measures, which will enable our robust banking sector to contribute decisively in restraining further slowdown in financial activity, if necessary. He added that the central bank have already made reductions in specific commercial bank products and loan interest rates and he further said that he expect more significant reductions in loan interest rates in time.
Chairman of the newly-established Association for the Promotion of Property Development, Giorgos Mouskides stated that Interest rate cuts in Cyprus could serve to attract more overseas investors to the country. Mr. Mouskides said that demand for property pushes up in line with the more attractive housing loans granted by the banks and the government’s measures to boost the property sector, he added that this is attributable to the Cypriots’ mood to look for opportunities.
Finally, Mr. Mouskides stressed the need for a cut in taxes and reduction of capital gains tax that stands at 20% and transfer fees at 8%. There is also a need to speed up the procedures for issuing Title Deeds.
In related news, Cyprus plans to tap the international bond markets by issuing one billion euro bond by June in a bid to cover the refinance of the public debt 2.5 billion euros expiring in 2009, Finance Minister Charilaos Stavrakis said. The remaining debt would be raised via domestic bond auctions and short-term borrowing through European treasury bills. He however clearly said that the government is making strenuous efforts so that the public debt will be refinanced with the smallest possible cost for the taxpayer.
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