Interest rate slightly up

04/06/2007 09:30

The Dutch long-term interest rate, based on the return of the latest ten-year government loan, averaged 4.3 percent in May. This is 0.1 of a percentage point up on April this year. The long-term interest rate stands at its highest level since July 2004.

The European Central Bank (ECB) has raised its interest rates by 0.25 of a percent point seven times in the space of fifteen months. Since 14 March 2007 the ECB deposit rate is 2.75 percent. The deposit rate is often considered as the bottom rate on the interest market. The main ECB interest rate, the repo rate, is 3.75 percent since 14 March.

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 1.9 percent in May. This equals the average in April.

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

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