Interest rate up

02/06/2006 13:00

The Dutch long-term interest rate, based on the return of the latest ten-year government loan, averaged 4,0 percent in May. This is 0.1 percent points up on April. The interest rate is climbing since September 2005, when the lowest level for a long time was reached.

The European Central Bank (ECB) raised its interest rates two times in a short period with 0.25 of a percent point. Since March 2006 the ECB deposit rate is 1.50 percent.

The deposit rate is often considered as the bottom rate on the interest. The main ECB interest rate, the repo rate, is 2.50 percent at the moment.

One of the main directives for the ECB’s decision to change or refrain from changing the interest level is the inflation level in the eurozone. The ECB aims a medium term inflation in the eurozone at approximately 2 percent. According to Eurostat, the statistical office of the European Union, it averaged 2.5 percent in May. In April inflation in the eurozone was 2.4 percent.

Capital market interest rate (latest ten-year government bond)

Capital market interest rate (latest ten-year government bond)