Interest rate up further

The Dutch long-term interest rate, based on the return of the most recent ten-year government loan, averaged 3.7 percent in April 2011, 0.3 of a percentage point up on March. Over the past seven months, the interest rate has risen by 1.2 percentage points.

In April 2011, the European Central Bank (ECB) decided to raise a number of its interest rates. On 13 April, both the repo rate and the deposit rate were raised by 0.25 of a percentage point, to 1.25 percent and 0.5 percent respectively. The deposit rate is often considered as the bottom rate of the money market.

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, prices in the eurozone are stable, if the inflation rate is close to 2 percent. Eurostat, the statistical office of the European Union, recorded an inflation rate of 2.8 percent in the eurozone in April 2011.

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