The Dutch long-term interest rate, based on the return of the most recent ten-year government loan, averaged 3.7 percent in March. This is 0.1 percentage points down on February. After a gradual drop in the second half of 2008, the long-term interest rate remained fairly stable in the first quarter of 2009.
In April 2009, the European Central Bank (ECB) decided to lower its interest rates. As from 8 April 2009, the ECB deposit rate will stand at 0.25 percent. The deposit rate is often considered as the bottom rate on the interest market. As from 8 April, the most important ECB interest rate, the repo rate, will stand at 1.25 percent.
One of the main guidelines for the ECB’s decision to change or refrain from changing the interest rate is the inflation level in the eurozone. According to the ECB, prices are stable in the eurozone, if the inflation rate is close to 2 percent. Eurostat, the statistical office of the European Union, calculated an average inflation rate of 0.6 percent for March. This is the lowest inflation rate in the euro zone ever. In February, inflation was 1.2 percent.
Capital market interest rate (latest ten-year government bond)