The rise of the six-month Euribor, which also affects Estonians’ loan and leasing payments, is not expected to make repayments substantially more expensive, analysts say.
Rain Leesi, head of investments at asset management company Avaron, said that year-end interest rate expectations have slowly started coming down.
The European Central Bank was expected to introduce three 0.25 percentage point interest rate hikes this year, but will no longer do so. This would have brought interest levels to around 2.7 to 2.8 percent.
“Eurozone inflation has risen to 3 percent and will probably continue to rise. If we look at what financial markets are pricing in today, then expectations today are that not much more than two interest rate hikes are expected, meaning interest rates could rise to around 2.5 percent by the end of the year, and beyond that the market today is not expecting further rate increases,” Leesi said.
However, a rate rise has already been factored into Euribor. “Meaning that if no further rate increases come, then Euribor also has no significant reason to rise further,” he noted.
Read more: ERR.EE
