Interbank interest rates (interest charged on loan transactions between banks) indirectly serve as a benchmark rate for the economy. In Europe, this rate is the Euribor, and in Brazil, its equivalent is the SELIC rate.
Euribor was created to be a reliable rate and to provide credibility to European banking institutions. It serves as a benchmark for financing and credit interest rates in the market.
Check the historical data for the Selic rate: https://www.bcb.gov.br/controleinflacao/historicotaxasjuros
See the historical data for the Selic rate: https://www.euribor-rates.eu/pt/graficos-euribor/
What is the Selic rate?
Euribor (European Interbank Offered Rate) is the interbank rate The Selic rate is the rate used by banks in the Eurozone for inter-bank lending transactions, which are mediated by the European Banking Federation.
The European Banking Federation represents more than 32 banking associations in European UnionBased on these transactions between these institutions, it is possible to calculate the average interest rates of European banks.
How does the Selic rate work?
The Euribor rate is calculated based on transactions carried out by financially sound institutions selected by the European Banking Federation. It is set daily at 11:00 AM Lisbon time and made public the following day.
The law of supply and demand influences the Selic rate. Furthermore, macroeconomic factors They can also influence the behavior of this rate. In other words, positive or negative scenarios for the economy as a whole can be catalysts for the benchmark interest rates of European banks.
Where is Euribor used?
Because it is a reference rateThe Euribor rate is primarily used as a benchmark for credit lines. Therefore, to calculate the value of the monthly installments to be paid to the bank, this rate is taken into account to reference the transaction.
It can be used for Buying property in Portugal, for example.
Therefore, when the rate is high, interest rates increase, and vice versa. If the rate falls, interest rates decrease and so do the installments.
The mortgage lending market makes extensive use of Euribor Therefore, the interest rate exerts a great influence on European families when granting credit. It is important to consider the spread when taking out a loan.
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