Interest rate slightly further down

The Dutch long-term interest rate, based on the return of the most recent ten-year public loan, averaged 1.9 percent in June 2012. This is the lowest rate in decades. The interest rate was 0.1 of a percentage point down on May.

The European Central Bank (ECB) has decided to change various interest rates in July 2012. The most important ECB rate, the repo rate, will be lowered by 0.25 of a percentage point to 0.75 percent effective from 11 July 2012.The deposit rate, often considered as the bottom rate of the financial market, will also be reduced by 0.25 of a percentage point effective from 11 July, to 0.00 percent. Both rates had also been lowered by 0.25 of a percentage point in November and December 2011.

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 close to 2 percent. Eurostat, the statistical office of the European Union, recorded an inflation rate of 2.4 percent in the eurozone in June, just the same as in May.

Capital market interest rate (latest ten-year public loan)