Euribor rates, which are associated with the vast majority of home loans in Portugal, rose on Friday to three, six and 12 months compared to Thursday, reaching new highs on the two longest maturities since the second half of 2020.
The acceleration of interest rate hikes in the interbank market this morning comes after the European Central Bank (ECB) decided to end public debt purchases earlier than expected, being very concerned about the evolution of inflation, which could anticipate the start of a rise in its key rates.
The sharp rise in inflation in Europe is linked in particular to the rise in raw materials, in particular oil, gas and electricity, but also foodstuffs, such as corn, which continues to rise slightly, being at maximum values. Commodity price developments have worsened with the escalation of the war in Ukraine.
The 6-month Euribor rate, the most used in Portugal for mortgages, fell to -0.414%, or 0.013 points more than during the previous session, reaching a new high since mid-September 2020, against the lowest historical -0.554%, verified on December 20, 2021.
At three months, the Euribor gained 0.003 points to -0.502%, after reaching -0.491% on Wednesday, a new high since October 2020, against the historic low of -0.605%, verified on December 14.
In 12 months, the Euribor rate was fixed at -0.268%, plus 0.025, reaching a new maximum since August 2020, of -0.283%, on February 14, and against the current minimum of – 0.518%, verified on December 20, 2021.
Euribor has been volatile, but under pressure, since the start of Russia’s invasion of Ukraine on February 24, having started to rise more significantly since February 4, after the European Central Bank (ECB ) admitted at the last monetary policy meeting (03 February) that could raise key rates this year due to rising inflation in the euro zone.
The evolution of Euribor interest rates is closely linked to the rise or fall of the key ECB rates.
The 3, 6 and 12 month Euribor rates entered negative territory in 2015, respectively on April 21, November 6 and February 5, 2016.
Euribor is set by the average of the rates at which a group of 57 banks in the euro zone are willing to lend money to each other on the interbank market.