The twelve-month Euribor, the most used indicator in Spain to calculate mortgage payments, fell this Friday to 3.533% around the interest rate line set by the European Central Bank (ECB), but despite this It is heading towards a new rise and it is foreseeable that it will add fifteen consecutive months of rises in March despite the banking crisis of the last few weeks.
According to market data collected by EFE, the average Euribor rate for March provisionally reached 3.672%, higher than the 3.534% in February, and above all, the -0.237% of a year ago.
Since last March 9, the Euribor has registered strong fluctuations due to the fear unleashed in the market by the banking situation both in the US and in Europe, and the rises in interest rates undertaken by the different central banks.
That March 9, the Euribor reached a daily rate of 4% (3,978%, maximum since 2012), after the day before, the president of the US Federal Reserve (Fed), Jerome Powell, made it clear that he would continue to organize raising interest rates to control inflation.
However, that same day the bankruptcy of the US bank Silicon Valley Bank was announced, which joined the bankruptcy carried out days before by Signature Bank. The market anticipated that, given the banking crisis, central banks will have to ease their monetary policy.
In addition, the financial crisis caused severe turmoil on the stock markets and investors fled to fixed income, which, in turn, caused bond prices to rise and yields to fall. All this led to the fact that on March 10, the Euribor registered its first daily after twelve consecutive sessions of falling promotions.
On March 16, the ECB announced a new rise in interest rates, of 50 basis points, and although the Euribor rebounded, the crisis of the Swiss bank Credit Suisse and its purchase by UBS, with the endorsement of the authorities, I take the indicator to fall again hard. Thus, last Wednesday, March 22, the indicator fell to a daily rate of 3.322%, the lowest since January.
The week ended with the rise in rates by the Fed and the Bank of England, and new market turbulence due to the distrust generated by the German Deutsche Bank, after announcing the repayment of subordinated debt before maturity.
Pending how the Euribor reacts to this new banking crisis, the indicator closed the week at a daily rate of 3.533%, and the provisional average rate for March reached 3.672%. This new rise will cause another increase in the installments of variable mortgages.