Interest rate unchanged

08/12/2006 12:00

The Dutch long-term interest rate, based on the return of the latest ten-year government loan, averaged 3.8 percent in November. This is equal on October. The interest rate had been increasing since February this year. In August and September it has dropped slightly, however.

The European Central Bank (ECB) raised its interest rates by 0.25 of a percent point six times in the space of one year. Since 13 December 2006 the ECB deposit rate is 2.50 percent. The deposit rate is often considered as the bottom rate on the interest market. The main ECB interest rate, the repo rate, is 3.50 percent since 13 December.

One of the main directives for the ECB’s decision to change or refrain from changing the interest rate 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 1.8 percent in November. In October inflation in the eurozone was still 1.6 percent.

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

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