Key interest rate

Key interest rates are interest rates that are set by responsible central banks — in our case, the European Central Bank (ECB) does this. There are three different key interest rates:

• The main refinancing rate 
  The main refinancing rate is the interest rate that commercial banks pay to borrow money from the ECB. If this key rate is raised, less money is borrowed by banks, which should boost the euro's value accordingly. If it is lowered, the opposite happens.  
  

• The marginal lending rate
  This rate determines how much commercial banks have to pay to borrow money from the ECB for a day or overnight (overnight lending) to balance debit and thus remain solvent.  
  

• The deposit rate
  The deposit rate is the interest that commercial banks pay or receive when they (have to) deposit excess money with the ECB.