Interest unchanged

The Dutch long-term interest rate, based on the return of ten-year government loan, averaged 4.4 percent in September 2008. This is equal on August. In June and July, the long-term interest rate averaged 4.7 percent, the highest level in nearly six years. 

On 8 October 2008, the European Central Bank (ECB) changed its interest rates. The ECB deposit rate currently stands at 2.75 percent. The deposit rate is often considered as the bottom rate on the interest market. As from 15 October 2008 the main ECB interest rate, the repo rate, stands at 3.75 percent. The last time the ECB raised its interest rates prior to this change (by 0.25 percentage points) was July.

One of the main guidelines for the ECB’s decision to change or refrain from changing the interest rate is the inflation level in the eurozone. According to the ECB, prices are stable in the eurozone if the inflation rate is close to 2 percent. Inflation has been above this target figure for more than a year now. Eurostat, the statistical office of the European Union, calculated an average inflation of 3.6 percent for September 2008.

Capital market interest rate (latest ten-year government bond)