The Bank of Cyprus on Friday announced that it has responded to the European Central Bank’s (ECB) interest rate reduction decisions, lowering its reference rate for loans linked to the ECB’s base rate to 2.90 per cent from 3.15 per cent, effective from February 5, 2025.

The bank explained that “this 0.25 per cent reduction will have a significant positive impact on customers, particularly in terms of their monthly loan repayments”.

“Nearly 12,000 borrowers whose loans are tied to the ECB base rate will see an immediate reduction in their instalments,” it added.

The bank pointed out that since the ECB began reducing rates in June 2024, the total decrease now amounts to 1.6 per cent (from 4.50 per cent to 2.90 per cent).

Additionally, the bank noted that interest rates for 8,000 other borrowers with loans linked to Euribor have also been decreasing steadily over recent months.

For example, it continued, Euribor, which peaked at 4.14 per cent in October 2023, has gradually declined to its current level of 2.59 per cent.

“It is estimated that the downward trend for both reference rates will continue,” the bank said.

Citing date from the ECB , the bank mentioned that loan interest rates for households in Cyprus decreased by 0.84 per cent from January to November 2024, compared to an average reduction of 0.40 per cent across the EU during the same period.

“The Bank of Cyprus remains committed to supporting the local economy, households, and businesses by offering products that meet diverse needs with competitive interest rates and attractive financing terms,” the announcement concluded.