MNI BRIEF:ECB Unifies Interest On Non-Monetary Policy Deposits

The European Central Bank has set out a uniform remuneration rate for non-monetary policy deposits held in the range of ESTR minus a spread of 20 basis points, the ECB said in a statement on Wednesday.

The rate will continue to apply as a ceiling for remunerating euro area government overnight deposits, it said, adding that most overnight deposits held with national central banks under the Eurosystem reserve management services framework are already remunerated at ESTR minus 20 basis points.

Exceptions will apply for non-monetary policy deposits held in Target for guarantee funds and prefunded accounts by financial market infrastructures domiciled in the European Economic Area, which will be remunerated at ESTR.

These changes “minimises the risk of potential interference” with monetary policy and maintains incentives to keep money in the euro area. The ECB has also decided to bundle legal provisions for the remuneration into a single act.