The Parliamentary Spokesperson of AKEL, George Loukaides, has raised concerns over Cyprus banks’ interest rate policies in a letter to the Governor of the Central Bank of Cyprus.
Loukaides criticised the financial institutions for increasing interest rates, a move that contradicts the European Central Bank’s recent decision to lower its three key interest rates.
In the letter, Loukaides described the banks’ stance as “provocative” and mostly exterminating to households and businesses.
AKEL’s spokesperson has called on the Central Bank to clarify its position regarding the banks’ policy and outline any planned actions to address the situation.
In June 2024, both the Central Bank Governor and finance minister urged banks to lower interest rates, and more specifically, the Governor of the Central Bank, Christodoulos Patsalides, appealed to banks to reconsider their reputation risk and the impact of societal discontent over high lending rates.
The full letter follows:
“It is with deep concern that we witness the policy of raising interest rates adopted by the country’s financial institutions, which stands in stark contrast to the European Central Bank’s decision to lower the three key interest rates by 25 basis points.
This approach by the banks is not only provocative but also detrimental to households and businesses, while undermining the competitiveness of the Cypriot economy. It is yet another action that will contribute to the banks’ ever-increasing profits in recent years, for which I remind you that AKEL has submitted a relevant bill in Parliament to tax these profits and direct the revenue towards targeted support for borrowers.
Therefore, we request that you provide us with the Central Bank’s position on the banks’ policy and the actions you intend to take to address this situation.”
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