The Dutch long-term interest rate, based on the return of the most recent ten-year government loan, averaged 3.9 percent in May. This is 0.1 percentage points up on April. After a gradual drop in the second half of 2008, the long-term interest rate remained fairly stable in the first five months of 2009.
In May 2009, the European Central Bank (ECB) decided to lower some of its interest rates. As from 13 May, the most important ECB interest rate, the repo rate, stands at 1.0 percent. The ECB deposit rate remained unchanged and stands at 0.25 percent. The deposit rate is often considered as the bottom rate on the interest market.
One of the main guidelines for the ECB’s decision to change or refrain from changing the interest rate is the level of inflation in the eurozone. According to the ECB, prices are stable in the eurozone, if the inflation rate is close to 2 percent. According to Eurostat, the statistical office of the European Union, inflation in the eurozone averaged 0.0 in May. Zero growth is unprecedented. Price rises in the eurozone dropped sharply in a relatively short period. Less than a year ago, inflation peaked at 4 percent.
Capital market interest rate (latest ten-year government bond)