A figure tied to many loans in Estonia, the six-month Euribor, or Euro Interbank Offered Rate, fell below 3.9 percent again just before Christmas.
Last Thursday, December 21, the Euribor fell to 3.899, marking the first time it had dipped below the 3.9 percent mark again since July. The rate fell even further on Friday to 3.895.
Starting the year at 2.732 percent, the last time the six-month Euribor stood below 3.9 percent was on July 4 this year.
From below zero to 4 percent
From the end of 2015 through last June, the six-month Euribor had remained below zero percent, clocking at -0.041 percent on January 4, 2016. It reached just above zero percent early last June, however, and broke above the 1-percent mark in August 2022 before continuing to climb.
The six-month Euribor exceeded the 4-percent mark for the first time since 2008 in mid-September, following the latest in a succession of decisions by the Governing Council of the European Central Bank (ECB) to hike key interest rates again. It peaked at 4.142 around a month later, after which it began to decline.
In late October, however, the Governing Council announced for the first time in more than a year that it would not be hiking three key ECB interest rates again, noting that rates are already high enough to bring euro area inflation back down to its target 2 percent in time.
Analysts predict the Euribor will continue to decline, and are forecasting it to reach around 3.5 percent next spring.
The six-month rate peaked in December 2008 at 5.448 percent.
Interbank offered rates
Euribor rates are based on the interest rates at which a panel of European banks borrow funds from one another, according to the Euribor homepage.
Prior to the latest economic crisis, the Euribor typically stood between 2-5 percent.
The London Inter-Bank Offered Rate (Libor) was a similar rate monitored as a key base rate in countries outside the Eurozone, including the U.S. and U.K. Phased out in stages, the U.S. dollar-based Libor ceased publication for one-, three- and six-month settings on June 30 this year.
Editor: Aili Vahtla