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The Euribor falls to 3.5% in the daily rate due to the SVB crisis

MADRID, 14 Mar.

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The Euribor falls to 3.5% in the daily rate due to the SVB crisis


The 12-month Euribor, the index to which most variable mortgages in Spain are referenced, has fallen this Tuesday to 3.509% in its daily rate, although the monthly rate remains above 3.8%, according to the data collected by Europa Press.

Between March 1 and 9, the daily evolution of the Euribor had maintained its upward trend, reaching a maximum since November 2008, standing at 3.978%. However, on Friday, March 10, the indicator began to decline, coinciding with the first alarm signals related to Silicon Valley Bank (SVB).

In fact, last Thursday, the entity anticipated that it would have losses of some 1,800 million dollars (1,700 million euros) in the first quarter, which plunged its price by 60% on Thursday and caused a significant withdrawal of deposits by customers, which further complicated the stability of the entity.

Finally, the United States Government announced an intervention by the SVB and assured the money to all depositors, while the Federal Reserve (Fed) reported "additional funds" with the aim of helping to guarantee that the entities have the capacity to satisfy the needs "of all its depositors".

However, the situation of SVB, as well as that of the bank specialized in the cryptocurrency market Signature Bank, which announced its liquidation last week, have reflected the effects that the rate hike is having on the economy.

The IG market analyst, Sergio Ávila, explained to Europa Press that the SVB crisis has revealed a problem that "must be closely monitored", such as the losses that banks can record in their bond portfolios at long term, since prices have fallen significantly due to the "aggressive" rises in interest rates in a short period of time, and their impact on bank liquidity.

This situation has made investors begin to anticipate changes in the course of rate hikes by central banks, mainly the Fed and the European Central Bank (ECB). Regarding the United States, for example, Goldman Sachs predicted yesterday that the Fed will not raise interest rates at the meeting that the US central bank will hold next week, although it will be pending the CPI data for February that will be published today. in the American country.

As for the European Central Bank (ECB), Ávila points out that the market has "the feeling that something can also break" in the euro area. "More than a contagion problem [due to the falls that banks recorded this past Monday], it may be a problem that with the continuation of the aggressive policies of central banks, more entities may find themselves in a similar situation, also in Europe and that includes Spain," says the expert.

In this way, the situation has been transferred to the Euribor, an indicator that reflects the expectations of the next steps that the ECB can take in its monetary policy in terms of interest rate increases, a decision that will be announced this Thursday.

Meanwhile, the Euribor has stood at 3.509% this Tuesday, compared to 3.858% that it marked yesterday and 3.908% last week. However, the monthly average continues at 3.8401%, above the 3.534% registered in February.