Central Bank of Cyprus maintained the countercyclical buffer (CCyB) for banks and investment firms to 0% of the total risk exposure amount for the period 1 April 2022 to 30 June 2022.

According to a press release issued by the CBC, the decision was taken in accordance with the methodology described in the CBC’s macroprudential policy and covers each licensed credit institution and each investment firm that provides the investment services of dealing on own account or underwriting of financial instruments and / or placing of financial instruments on a firm commitment basis.

Based on the time series ending on 30 September 2021, the gap between the credit-to-GDP ratio and its long term trend (credit-to-GDP gap) based on the broad credit definition is -61.5, while the gap between the credit-to-GDP ratio and its long term trend (credit-to-GDP gap) based on the narrow (bank) credit definition is -58.2, the CBC said.

“Given that the credit-to-GDP gap is lower than 2 percentage points and taking into account the additional indicators that were assessed by the CBC, the benchmark buffer guide is 0% and the CCyB rate remains at 0%,” the CBC added.