Cyprus Economy Adapts to ECB Monetary Policy Cycle

Cyprus's economy is adjusting to the European Central Bank's monetary policy cycle. A recent report by the Central Bank of Cyprus found that new bank lending in Cyprus has shifted towards longer-term fixed-rate loans, narrowing the gap between lending and deposit rates.

This shift brings domestic financing conditions closer to those prevailing across the eurozone. Eurobank reported a net profit of €738 million for the first half of 2026, with its Cyprus operations contributing €231 million to this figure.

The bank's CEO, Fokion Karavias, stated that despite ongoing geopolitical uncertainty and renewed tensions in the Middle East, the economies of their core markets have remained on a solid growth trajectory. He also noted that the Greek economy has remained resilient due to investment activity, tourism, and continued expansion in business lending.