Euribor rates rise on key maturities, approaching 4% in 12 months – Executive Digest

Euribor prices are higher today on the main maturities, compared to Friday, bolstering the new three-month and 12-month maximums, close to 4% over the long term.

The 12-month Euribor rate, currently the most widely used in Portugal for variable rate home loans, advanced today, set at 3.859%, plus 0.033 pips, the new maximum since December 2008.

According to the Bank of Portugal, 12-month Euribor accounts for 43% of the “stock” of variable rate permanent home equity loans, while six-month Euribor represents 32%.

After rising to 0.005% on April 12, 2022, and for the first time positive since February 5, 2016, the 12-month Euribor has been in positive territory since April 21, 2022.

Within six months, the price of Euribor, which entered the positive zone on June 6, has risen today to 3.363%, up 0.010 points from Friday.

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

The three-month Euribor, which entered positive territory on July 14 for the first time since April 2015, rose today, set at 2.875%, plus 0.026 points and a new high since January 2009.

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

Euribor started to rise further since February 4, 2022, after the European Central Bank (ECB) admitted that it may raise key interest rates this year due to rising inflation in the Eurozone and the trend strengthened with the onset of Russia’s invasion of Ukraine on February 24, 2022.

At its last monetary policy meeting, on February 2, the ECB again raised key interest rates by 50 basis points, the same as on December 15, when it began slowing the pace of increases with respect to the two previously recorded, which were 75 basis points, on respectively on October 27 and September 8.

On July 21, the European Central Bank increased, for the first time in 11 years, by 50 basis points, the three main interest rates.

Three, six and 12-month Euribor prices hit all-time lows, respectively, -0.605% on December 14, 2021, and -0.554% and -0.518% on December 20, 2021.

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