Interest rate slightly lower

04/09/2006 14:40

The Dutch long-term interest rate, based on the return of the latest ten-year government loan, averaged 3,9 percent in August. This is 0.1 percent point lower than in July. The interest rate had been increasing since February this year, but this development did not continue therefore in August.

The European Central Bank (ECB) raised its interest rates by 0.25 of a percent point four times in the space of one year. Since 9 August 2006 the ECB deposit rate is 2.0 percent. The deposit rate is often considered as the bottom rate on the interest market. The main ECB interest rate, the repo rate, is 3.0 percent since 9 August.

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 at a medium-term inflation in the eurozone of approximately 2 percent. According to Eurostat, the statistical office of the European Union, it averaged 2.3 percent in August. In July 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)