European Central Bank Main Refinancing Rate
The Main Refinancing Rate is also called the Minimum Bid Rate or the Repo Rate. This is the interest rate at which the European Central Bank (ECB) refinances the operations that provide the major part of liquidity to the secondary banking system. The ECB decides eight times a year on interest rates. The decision is made by six members of the ECB executive board and fifteen members of the Eurozone Central Banks. The decision is usually anticipated and therefore priced in by the market. The ECB’s press conference statement that usually follows the main refinancing rate get the most attention since the change in the refinancing rate is already history once it is moved. Although, there are times when the rate is unexpected and the market reacts violently.