At an unscheduled meeting held today, for the purpose of full harmonisation with the official interest rates of the European Central Bank, the Monetary Policy Committee (MPC) took the following monetary policy decision:
The minimum bid rate on the main refinancing operations decreases by 0,50 percentage point to 4,00%. The interest rate on the marginal lending facility and the interest rate on the overnight deposit facility remain unchanged at 5,00% and 3,00%, respectively.
In parallel, taking into account recent questions and concerns regarding the base rate of banks applicable for existing floating-rate loans in Cyprus pounds, the MPC determined, pursuant to section 40(1)(c) of the Central Bank of Cyprus Law, that with immediate effect, the base rate of banks for such loans shall be the minimum bid rate on the main refinancing operations. It is clarified that with the conversion of these loans into euro, in accordance with the Euro Adoption Laws, 2007, the base rate applied shall be the minimum bid rate on the main refinancing operations of the European Central Bank.