Interest rate almost unchanged in January
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The Dutch long-term interest rate, based on the return of the latest ten-year government bonds, averaged 3.3 percent in January, almost the same as in December. In that month the long-term interest rate fell by 0.1 percent point.
The European Central Bank (ECB) increased its interest rate by 0.25 percent point on 1 December 2005. The previous ECB rate change was in June 2003, when the ECB lowered its rate by 0.5 of a percent point. The lowest rate on the market is the ECB deposit rate, which is 1.25 percent as of December 2005. The main ECB interest rate, the repo rate, is 2.25 percent as from December 2005. A Focus article released on 1 December in the Economic Monitor pursues the relationship between the capital market interest rate and interest rate interventions by the ECB.
A major reason for the ECB to change its interest rate is the inflation rate in the eurozone. In the last couple of years inflation stayed around 2.1 percent, with a dip in February 2004 of 1.6. The inflation rate in the eurozone in December averaged 2.2 percent. This is 0.1 of a percent point down on November.