ECB rate
1. Main Refinancing Rate (Main Rate)
- This is the most important rate set by the ECB. It’s the interest rate at which commercial banks can borrow money from the ECB for short-term financing.
- When the ECB raises or lowers this rate, it directly affects interest rates on loans, mortgages, and savings across the Eurozone.
2. Deposit Facility Rate
- This is the interest rate at which commercial banks can deposit their excess reserves overnight with the ECB.
- If the ECB sets a negative deposit rate, banks may charge customers for holding deposits or look for alternative ways to lend money to stimulate economic activity.
3. Marginal Lending Facility Rate
- This is the rate at which commercial banks can borrow from the ECB overnight if they need additional liquidity.
- This rate is usually higher than the main refinancing rate and serves as a ceiling for short-term borrowing.