Euribor’s daily evolution is becoming positive for the first time since 2016

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The 12-month Euribor recorded the positive value of its daily exchange rate for the first time this Tuesday after entering negative territory in February 2016, in anticipation of future interest rate hikes by the European Central Bank (ECB), according to the scenario. The war in Ukraine and the less transitional nature of inflation were noted. The 12-month Euribor, the index on which most Spanish mortgages are cited, raised its daily interest rate to 0.005%, putting the average for April at -0.057% higher than the -0.502% for which 2021 closed.

The index went negative for the first time in history in February 2016 due to the ECB’s ultra-expansionary policy to recover the eurozone and accumulated below 0% for more than six years. After a historic low of -0.518% in the daily exchange rate on December 20, 2021, the 12-month Euribor started to grow, which was strengthened by the change of words of the President of the European Central Bank (ECB), Christine Lagarde. , Which has decided to raise interest rates due to the escalation of inflation in Europe and the energy crisis caused by the war between Russia and Ukraine.

The Spanish Mortgage Association (AHE) explains in its latest quarterly bulletin that Euribor growth this year responds to expectations of impending interest rate hikes, in a scenario in which war in Ukraine and a less transitory nature of inflation will help the ECB to maneuver its ECB.

The ECB President opened the door to interest rate hikes in February this year, and at a monetary policy meeting in March, the agency decided to accelerate the de-escalation of net asset purchases under the APP program so that they would be fully completed in July. However, due to the uncertainty of the “shock” caused by the war, the future orientation of the rate increase has changed.

Earlier, the agency said rates would rise after the asset purchase was completed. But in March, he reversed that forecast, indicating that any monetary adjustments would be made “at some point” after the completion of net asset purchases. Similarly, any change in interest rates will be “gradual.”

It was recently revealed in the minutes of the meeting that several members of the ECB Governing Board supported the launch of a roadmap for raising interest rates during the summer months to halt price increases. Analysts are already expecting Euribor to end in 2022 with positive values, which will increase the price of mortgage installments related to variable rates.

In its most recent quarterly strategy report, the Banking Analysis Department expects Euribor to be around 0.40% in December 2022 and around 0.80% in 2023, while CaixaBank Research predicts that the index will grow to 0.13% this year and that it will be quoted above 0.85. % next year.

In this scenario, experts expect financial institutions to increase fixed-rate mortgages and improve variable-rate mortgages.

Source: El Diario

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