A new record has been set. The German running yield, described as the index of fixed interest securities has descended to 0.02%, a level that has never been reached before. Only days before, on February 24, 2016 the previous record low of 0.04% had made the news.
Last year already, the running yield displayed considerable fluctuations having reached 0.05% early that year before it temporarily recovered to 0.08% in mid-2015. Since this short recovery the market observed a steady decline of the interest. It remains to be seen whether this year’s leap day marks the final low point of the interest rate’s decline or whether further lows will follow.
European Bank will influence future of interest level
While this development will certainly please German Federal Minister of Finance, Wolfgang Schäuble and other debtors, savers and depositors, on the other habd, are more likely to become nervous. They will receive continuously decreasing interest on their deposits, if anything still. The coming session of the European Central Bank (EZB) in Frankfurt on March 10 will shed some light on its plans to implement measures against low inflation. This could mean a continuation of the low-interest phase.
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