Regardless of whether you want to invest money or need a loan, the decisive factor is the interest you get or the conditions under which you have to pay back a loan to the bank. These interest rates depend on the key interest rate of the European Central Bank (ECB) – and this has just been reduced by 0.25 percentage points to 3.5 percent.
What does the interest rate cut mean for borrowers?
Along with the key interest rate, the main refinancing rate was also reduced by 0.6 percentage points to 3.65 percent. This is particularly good news for people who need a credit or loan. This is because it determines the conditions under which commercial banks can borrow money from the central bank. If they have to pay less interest, they also charge less interest from customers who borrow money from them.
“However, in the case of 0.25 percentage points, that doesn’t make much of a difference,” says Ulrich Ueckerseifer from the WDR business editorial team. In addition, many banks had already lowered interest rates before the ECB reduced the key interest rate. “But everything indicates that the ECB will lower the key interest rate further in the coming months,” says Ueckerseifer.
