Dutch interest rate at all-time low

04/08/2014 15:00

The Dutch long-term interest rate based on the return of the most recent ten-year public loan dropped further in July,  to an average of 1.4 percent. From May to June, it had already fallen from 1.7 to 1.6 percent. The interest rate is now at its lowest level since De Nederlandsche Bank (DNB) began the time series in mid-1986. At 9.2 percent, the highest rate in this series was recorded in October 1990.

In June 2014, the European Central Bank (ECB) changed various interest rates. The most important ECB rate, the repo rate, was lowered by 0.10 of a percentage point to 0.15 percent, effective from 11 June 2014. The deposit rate, often considered as the bottom rate of the financial market, was also lowered by 0.10 of a percentage point with effect from 11 June 2014, to -0.10 percent.

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 below, but close to, 2 percent. Eurostat, the statistical office of the European Union, recorded an inflation rate of 0.4 percent in the eurozone in July.

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.