ECB caps remuneration rates for eurozone government deposits

New rate to also apply to non-monetary policy deposits, as ECB shrinks balance sheet

ECB 2017

The European Central Bank (ECB) has re-introduced a cap on the remuneration of government deposits and non-monetary policy deposits as part of efforts to reduce its balance sheet.

The new rate, announced today (April 17), is based on the euro short-term rate (€STR) minus a spread, which was set to 20 basis points. The spread may be changed “in order to preserve the effectiveness of monetary policy transmission”, the ECB said.

Overnight deposits held at national central banks under the Eurosystem

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