The six-month Euribor rate continues to rise

The six-month Euribor benchmark rate continued to rise on Tuesday, reaching 1.337 percent, according to data from RUS.POSTIMEES.EE. The Euribor rate, a key indicator on the euro interbank financial market, is closely linked to deposit rates set by the European Central Bank (ECB). The ECB raised its key interest rates for the first time in over a decade in its meeting on July 21, 2022, increasing the base rate to 0.5 percent, the deposit rate to zero, and the margin lending rate to 0.75 percent.

The ECB stated that it deemed a “more substantial first step” in normalizing interest rates necessary, based on an updated assessment of inflationary risks. Alongside the rate increase, the ECB announced the launch of a new asset purchase program, the Transmission Protection Instrument (TPI), designed to reduce borrowing costs discrepancies across euro zone countries. The TPI is intended to counter disruptive market dynamics and complements other ECB tools.

The scale of asset purchases under the TPI will depend on the severity of risks to monetary policy. The ECB plans to continue normalizing interest rates, with future decisions dependent on incoming data and aimed at achieving a 2 percent inflation target in the medium term. The ECB will also continue reinvesting proceeds from maturing assets acquired under the Asset Purchase Programme (APP) and the Pandemic Emergency Purchase Programme (PEPP), with PEPP purchases concluding in March, through at least the end of 2024.

Euribor rates (as of June 6, 2022) were: Euribor, % change in %: 1 week -0.060, 0.013; 1 month 0.368, 0.070; 3 months 0.816, 0.033; 6 months 1.337, 0.039; 12 months 1.921, 0.047. Key words: euribor, six, month, credit, mortgage credit, interest rate, leasing.

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