This morning a meeting was held at the Central Bank of Cyprus (CBC) which was attended by Governor Demetriades, representatives of credit institutions and CBC staff.
During the meeting, views were exchanged on the draft circular sent yesterday by the CBC to the credit institutions in Cyprus, proposing the gradual reduction of deposit rates.
In concluding the meeting, which was conducted in an atmosphere of mutual understanding, the Governor and the representatives of the credit institutions agreed to implement the CBC proposal for the gradual reduction in deposit rates as of 1 May 2013. This implies that there will also be a gradual decline in lending rates.
In summary, the proposal states that if credit institutions offer deposit rates which exceed the Euribor plus 300 basis points, then the credit institution in question must maintain additional capital.