ECB keeps its deposit rate at 2.50% after two hikes, as Cyprus adds a 1% bank buffer

The decision in figures

• Deposit facility: 2.50%; main refinancing operations: 2.65%; marginal lending facility: 2.90%.
• The deposit rate was 2.00% from June 2025, then rose to 2.25% in June 2026 and 2.50% in September 2026.
• The ECB sees upside risks to inflation and downside risks to growth from the energy shock.
• It is not committing to any rate path and will decide meeting by meeting.

The Governing Council said underlying inflation had stayed broadly stable and wages had not reacted materially so far, according to the ECB press release.

Cyprus adds a capital buffer for banks

On 2 November the Central Bank of Cyprus decided to introduce a systemic risk buffer of 1% on all exposures of authorised credit institutions in Cyprus, effective from 31 December 2026, according to the CBC announcement. The buffer requires banks to hold more capital; it is not a direct limit on mortgage lending.

Why it matters for buyers

Borrowers in euro area markets such as Cyprus, Greece and Bulgaria should not expect cheaper loans soon. Buyers with variable-rate mortgages should test their payments at current rates, and those taking new loans should compare fixed and variable offers.

For what the September hike meant for home financing, see our earlier analysis.