In the first six months of 2021, debt restructuring in Cyprus increased by 400%, reaching 1.4 billion euros.
This was announced on Tuesday, December 7, by the chairman of the Central Bank of Cyprus, Constantinos Herodotou.
He also stressed that he intends to oppose an increase in interest rates, since the current high inflation is temporary. Herodotou noted that an increase in rates could cause a serious blow to businesses and households.
The chairman of the Central Bank said that in the first half of 2020, the restructuring of loans reached 270 million euros, and in the first six months of 2021, after the intervention of the country's main financial institution and the introduction of a moratorium on loan repayment - 1.4 billion euros.
'The fact that all these loans were not overdue, that all businesses and households were able to maintain their loans in working order, is a significant success for us,' Herodotus said.
Commenting on the upward trend in inflation, he quoted the position of the European Central Bank (ECB) that inflation is a temporary surge, the peak of which will come in 2022. This is not due to an increase in demand, but to a small number of offers that have not yet recovered from the COVID-19 pandemic.
As you may know, restructuring is a change in the terms of an existing loan.
The loan agreement continues to be valid. This program is aimed at improving the financial situation of a borrower who has difficulties with debt repayment.
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