Interest rates and inflation

The Governing Council of the European Central Bank (ECB) sets interest rates in the euro area. The Council consists of the central bank governors of all euro countries plus the ECB Executive Board, with all members having an equal vote. The Eurosystem is responsible for preparing and implementing monetary policy and is made up of the ECB and the euro countries’ central banks.

The ECB Governing Council sets the key interest rates for the euro area on a monthly basis: the (minimum bid) rate on the main refinancing operations that are the basis for money market rates and the rates on the marginal lending facility and the deposit facility.

Assets may serve as collateral for monetary policy operations and intraday lending. Such assets are known as eligible assets and must satisfy eligibility criteria drawn up to protect the Eurosystem against potential credit risk, to increase operational efficiency and to ensure a level playing field for all banks.

De Nederlandsche Bank (DNB) manages both the reserves of gold and foreign currencies of the Dutch State and a proportion of the reserves of the European Central Bank (ECB). Reserves are predominantly invested in government bonds and any gains on these investments accrue to the Dutch State.

The weekly statement by the European Central Bank (ECB) provides insight into the ECB’s balance-sheet positions.