IDEAS home Printed from https://ideas.repec.org/a/bde/journl/y2023i03n08.html
   My bibliography  Save this article

Spread between the euro short-term rate (€STR) and the deposit facility rate

Author

Listed:
  • Yasmina Santalla Pérez

    (Banco de España)

  • María del Carmen Castillo Lozoya

    (Banco de España)

  • Laura García Ramos

    (Banco de España)

  • José María Arregui Gil

    (Banco de España)

Abstract

Rationale This article analyses the factors that are contributing to the widening of the spread between the euro short-term rate (€STR) and the deposit facility rate, with a view to assessing monetary policy transmission in the Eurosystem. Takeaways •The key factors that explain the behaviour of this spread are the expansion of the Eurosystem’s balance sheet and the change in the monetary policy stance. •The pass-through of the recent interest rate hikes to money market rates has been effective and cannot explain the widening of the spread. •Once the rate hiking cycle comes to an end, the contraction in the Eurosystem’s balance sheet can be expected to curb or even reverse the trend observed in the spread.

Suggested Citation

  • Yasmina Santalla Pérez & María del Carmen Castillo Lozoya & Laura García Ramos & José María Arregui Gil, 2023. "Spread between the euro short-term rate (€STR) and the deposit facility rate," Economic Bulletin, Banco de España, issue 2023/Q3.
    • Handle: RePEc:bde:journl:y:2023:i:03:n:08
    DOI: https://doi.org/10.53479/33452
    as

    Download full text from publisher

    File URL: https://www.bde.es/f/webbe/SES/Secciones/Publicaciones/InformesBoletinesRevistas/BoletinEconomico/23/Files/be2303-art08e.pdf
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.53479/33452?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    Euro short-term rate; deposit facility; monetary policy transmission; money market; money market statistics; Eurosystem balance sheet; excess liquidity; non-bank financial institutions;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bde:journl:y:2023:i:03:n:08. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ángel Rodríguez. Electronic Dissemination of Information Unit. Research Department. Banco de España (email available below). General contact details of provider: https://edirc.repec.org/data/bdegves.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.