Interest rate unchanged in August

Dutch long-term interest rate, in relation to the return of the latest  ten-year period government loan, averaged 3.3 percent in August 2005, the same as in July. In that month the long-term interest rate fell by 0.2 percent point.

The European Central Bank (ECB) did not adjust its interest rates in August 2005. The ECB last adjusted its interest rates in June 2003, raising them by 0.5 of a percent point. The lowest rate on the market is the ECB deposit rate which has been by 1.00 percent since June 2003. The main ECB interest rate, the repo rate, has been 2.00 percent since June 2003.

A major guideline for the ECB in determining its interest rate is the inflation rate in the eurozone. In the last couple of years inflation, with a dip in February 2004 of 1.6 percent and a peak of 2.5 percent in May 2004, fluctuates around 2.1 percent. According to the Statistical office of the European Union (Eurostat) the inflation in the eurozone  is expected to be 2.1 percent on average in August. The European Central Bank (ECB) considers the ideal inflation rate, for a medium long term, to be “close to 2 percent”.

Capital market interest rate (latest ten-year period government loan)