The Euribor rate falls to a new low after 3 months and rises after 6 and 12 months.

The Euribor rate fell this Monday to a new three-month low since September 2023 and rose to the six- and 12-month rates from Friday after closing May with a lower average across the three maturities.

With the changes this Monday, Euribor remained very close, but the three-month rate, which fell to 3.782%, remained above the six-month rate (3.755%) and the 12-month rate (3.722%).

The six-month Euribor rate, which has become the most used rate in Portugal for home loans with variable rates and exceeded 4% between September 14 and December 1, rose this Monday to 3.755%, plus 0.010 points, after an increase on October 18. up to 4.143%, the highest since November 2008.

Bank of Portugal (BdP) data for March shows the six-month Euribor rate is the most used, accounting for 36.6% of total floating rate homeownership loans. The same data shows that the 12- and three-month Euribor rates were 34.3% and 24.9% respectively.

The 12-month Euribor rate, which was above 4% between June 16 and November 29, also rose this Monday to 3.722%, up 0.011 points from the previous session, against the highest since November 2008, 4.228%. registered in September. 29th.

The three-month Euribor rate, on the contrary, fell, settling at 3.782%, minus 0.003 points and a new minimum since September 1, 2023, after rising on October 19 to 4.002%, the maximum since November 2008.

The average Euribor rate fell in May for three, six and 12 months, but more sharply than in April and for shorter maturities.

The Euribor average in May fell 0.073 points to 3.813% in three months (compared to 3.886% in April), 0.052 points to 3.787% in six months (compared to 3.839%) and 0.021 points to 3.681% in 12 months (up from 3,702). %).

Meanwhile, the market is already looking ahead to the ECB’s monetary policy meeting on Thursday, where the body is expected to cut interest rates by 25 basis points, its first cut since March 2016.

This reduction, if materialized, should lead to a moderate reduction in Euribor rates and thus a reduction in home loan provision.

Analysts expect Euribor rates to reach around 3% by the end of the year.

At its last monetary policy meeting, on April 11, the ECB kept benchmark interest rates at their highest level since 2001 for the fifth time in a row, following 10 hikes since July 21, 2022.

More significantly, the Euribor began to rise on February 4, 2022, after the ECB acknowledged that it might raise key interest rates due to rising inflation in the eurozone, a trend that accelerated with the start of Russia’s invasion of Ukraine in February. 24, 2022.

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

Euribor is set as the average rate at which a group of 19 eurozone banks are willing to lend to each other on the interbank market.

MK // Advisor

Lusa/The End