The Central Bank of Cyprus (CBC) has announced that excess liquidity in the Cypriot banking system declined to €17.4 billion at the end of 2025, down from €18.4 billion a year earlier.

The figures were included in a report entitled “The implementation of monetary policy in Cyprus”, which reviewed developments during 2025.

According to the central bank, the value of its monetary policy bond portfolio, consisting of securities acquired under the Asset Purchase Programme (APP) and the Pandemic Emergency Purchase Programme (PEPP), fell from €6.5 billion to €5.7 billion during the year.

The balance sheet of the Central Bank of Cyprus remained broadly stable in 2025, with total assets increasing marginally from €28.6 billion at the end of 2024 to €28.7 billion by the end of last year.

The CBC said developments within the banking sector showed significant growth in lending activity during the period.

Specifically, loans held by the banking sector increased from €27.6 billion at the end of 2024 to €31.7 billion by the end of 2025.

At the same time, deposits and cash equivalents declined from €20.4 billion to €19.8 billion.

Despite the reduction in deposits and cash equivalents, the banking sector’s total liabilities rose from €59.4 billion to €63.1 billion during 2025.

According to the central bank, the increase in liabilities was driven mainly by higher deposits from households and non-financial corporations.