Atlas Macro

Central banks

ECB Deposit Rate

The interest rate banks earn on money they deposit overnight with the European Central Bank. It is the ECB's main policy rate and anchors short-term interest rates across the euro area.

Key points

  • Set by the ECB Governing Council, which meets every six weeks.
  • Was negative from 2014 to 2022, reaching a low of -0.5%.
  • The gap between it and US rates is a major driver of the euro-dollar exchange rate.

Example

If the ECB holds its deposit rate at 2% while the Fed's rate is 4%, money tends to flow towards higher-yielding dollar assets, all else equal.

In history

The ECB raised the deposit rate from -0.5% in July 2022 to 4% in September 2023, the highest since the euro was created, then cut it back to 2% by June 2025.

Related terms