He said that the unitary interest rate policy, which will set rates across the cooperative sector, is necessary for the restructuring plan of the coop credit sector, while this way there will be better management of interest rate risk.

The new interest rate policy that the coop is attempting to apply affects 237,000 loans, valued at €13 billion. The CCB has decided to create five common basic interest rates for all the coop institutions, affecting housing loans, consumer loans, business loans and student and farmer loans.

During the discussion of the bill in the House of Representatives on Monday, the MPs asked several questions, and the CCB committed that it would send a memo that answers those questions within the next few days.

Stavrinides added that “our philosophy is that there will be no changes to the interest rate.” In fact, he said that some will benefit from a rounding down of the interest rate.

Regarding the interest rates, the CCB is not speaking until the bill is voted into place. However, it is considered certain that the interest rates of the coop will be along the same levels as those of other banks. It is estimated that the basic housing loan will be at 2.75% and the basic business loan at 2.95%.

Source: InCyprus