The Dutch long-term interest rate, based on the return of the most recent ten-year government loan, averaged 4.0 percent in June. This is 0.1 percentage points up on May. June was the third month in a row in which the interest rate rose slightly.
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 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, there was 0.1 percent deflation in June. Deflation is unprecedented. Just one year ago, inflation in the Eurozone stood at 4 percent. This was the highest inflation rate since the introduction of the euro.
Capital market interest rate (latest ten-year government bond)