Euribor rates fall at six months and rise at three and twelve months

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Euribor rates fell today at six months and rose at three and twelve months compared with Friday.

The 12-month Euribor rate, currently the most widely used in Portugal for variable-rate mortgages, rose today by 0.010 points to 3.938%, after having risen on May 29 to 3.982%, a new record since November 2008.

According to April 2023 data from the Bank of Portugal, 12-month Euribor accounted for 40.9% of outstanding variable-rate permanent home loans. The same data show that six- and three-month Euribor rates accounted for 33.9% and 22.8% respectively.

The average 12-month Euribor rate rose from 3.757% in April to 3.862% in May, an increase of 0.103 points.

At six months, the Euribor rate, which had entered positive territory on June 6, 2022, retreated today to 3.753%, down 0.009 points, after having reached its new maximum since November 2008, at 3.781%, also verified on May 29.

The average six-month Euribor rate rose from 3.516% in April to 3.682% in May, an increase of 0.166 points.

The three-month Euribor rate stood at 3.478%, up 0.009 points on Friday. On June 5 this year, the Euribor rate reached its highest level since November 2008, when it stood at 3.493%.

The average three-month Euribor rose from 3.179% in April to 3.372% in May, an increase of 0.193 percentage points.

Euribor began to rise more significantly from February 4, 2022 after the European Central Bank (ECB) admitted it might raise key interest rates due to rising inflation in the eurozone, and the trend was reinforced with the start of Russia’s invasion of Ukraine on February 24, 2022.

At the last monetary policy meeting on May 4, the ECB raised its key interest rates for the seventh consecutive time, but only by 25 basis points, a smaller increase than on March 16, February 2 and December 15, when it began to slow the pace of increases compared with the previous two, which were 75 basis points on October 27 and September 8 respectively.

On July 21, 2022, the ECB raised all three key interest rates by 50 basis points for the first time in 11 years.

The three-, six- and twelve-month Euribor rates reached historic lows of -0.605% on December 14, 2021, -0.554% and -0.518% on December 20, 2021 respectively.

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

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