Cyprus' central bank holds final interest rate meeting

Tuesday December 11th , 2007

The Central Bank of Cyprus has held its last meeting to set interest rates ahead of its accession to the euro.

This is likely to be the last time the monetary policy committee (MPC) meets to determine rates, as they will be decided by European Central Bank (ECB) after January 1st.

Members of the MPC decided to leave the main refinancing rate on hold at 4.5 per cent, while the overnight deposit facility was also left unchanged at three per cent.

Meanwhile, the Lombard rate was held at five per cent.

After Cyprus joins the single European currency on New Year's Day, all three rates will be replaced by those enforced by the ECB.

Athanasios Orphanides, governor of the island's central bank, told the Cyprus Mail: "The gap with [ECB] interest rates is only 50 basis points so the change in the currency will have no marked difference."

The country's entry into the euro comes more than three years after it became a member of the European Union.