Interest rate exceptionally low

The Dutch long-term interest rate, based on the return of the most recent ten-year public loan, averaged 1.6 percent in December 2012. This is the lowest level in decades.

In July 2012, the European Central Bank (ECB) decided to change various interest rates. The most important ECB rate, the repo rate, was lowered by 0.25 of a percentage point to 0.75 percent on 11 July 2012.The deposit rate, often considered as the bottom rate of the financial market, was also reduced by 0.25 of a percentage point on 11 July, to 0.00 percent. Both rates had also been lowered by 0.25 of a percentage point in November and December 2011.

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, eurozone prices are stable if the inflation rate is close to 2 percent. Eurostat, the statistical office of the European Union, recorded an inflation rate of 2.2 percent in the eurozone in November, i.e. 0.3 percentage points down on October.

Capital market interest rate (latest ten-year public loan)

Capital market interest rate (latest ten-year public loan)

For more information on economic indicators, the reader is referred to the Economic Monitor.