March 29, 2023

3, 6 and 12-month Euribor rises to fresh over 14-year highs – Executive Digest

The three-, six- and 12-month Euribor rates rose to new highs for more than 14 years today, standing at 2.682%, 3.166% and 3.542% respectively.

The 12-month Euribor rate, which is currently the most widely used in Portugal for floating-rate mortgages, rose today to 3.542%, plus 0.024 points, a new high since December 2008.

According to the Bank of Portugal, the 12-month Euribor already represents 43% of the “stock” of floating-rate permanent home ownership loans, while the six-month Euribor represents 32%.

After rising to 0.005% on 12 April, the first positive since 5 February 2016, the 12-month Euribor has been in positive territory since 21 April.

The average 12-month Euribor rose from 3.018% in December to 3.338% in January, plus 0.320 points.

Within six months, the Euribor rate, which entered positive territory on June 6, also rose today to 3.166%, plus 0.031 points, a new high since December 2008.

The six-month Euribor was negative for six years and seven months (between 6 November 2015 and 3 June 2022).

The six-month average Euribor rose from 2.560% in December to 2.864% in January, plus 0.304 points.

By the same token, the three-month Euribor, which entered positive territory on July 14 for the first time since April 2015, rose today to settle at 2.682%, plus 0.022 points, a new high since January 2009.

The three-month Euribor rate was negative between 21 April 2015 and the latest 13 July (seven years and two months).

The average Euribor quarter rose from 2.063% in December to 2.354% in January, an increase of 0.291 points.

Euribor started to rise significantly from 4 February 2022 after the European Central Bank (ECB) admitted it could raise key interest rates this year due to rising inflation in the eurozone and the trend was boosted by the start of Russia’s invasion of Ukraine on February 24, 2022.

At its latest monetary policy meeting on February 2, the ECB once again raised key interest rates by 50 basis points, the same increase as on December 15, when it began to slow the pace of hikes compared to the previous two. which were 75 basis points, respectively on 27 October and 8 September.

On July 21, the ECB raised its three main interest rates by 50 basis points for the first time in 11 years.

Three-, six- and 12-month Euribor rates hit historic lows, respectively, of -0.605% on 14 December 2021, -0.554% and -0.518% on 20 December 2021.

Euribor is determined by the average of the interest rates at which a group of 57 banks in the eurozone are willing to lend money to each other in the interbank market.

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