Cyprus opts to maintain interest rates at 4.5%
The central bank of Cyprus opted at the end of last week to maintain base interest rates at their current 4.5% level, and is expected to bring them in line with the eurozone level by January.
The bank's monetary policy committee (MPC) voted by a majority of 4 to 1 that the domestic and international macroeconomic outlook had not changed significantly since the MPC's last meeting in January.
There are expectations that the bank will begin to lower rates in line with the European Central Bank's (ECB) level, which currently stands at 3.5%.
One of the reasons Cyprus' monetary policy custodians chose not to lower rates is the likelihood of a eurozone rate hike in the coming months, analysts have conjectured.
Cyprus has ambitions to adopt the euro at the start of 2008, requiring it to bring its own cost of borrowing in line with the rest of the eurozone by that time.
In January, Cyprus' inflation rate was tracking at 1.4% year-on-year growth, comfortably below the ECB's maximum target of 2%.
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