EURSTR

EURSTR (Euro Short-Term Rate) is a benchmark interest rate that reflects the wholesale euro unsecured overnight borrowing costs of euro area banks. It is published daily by the European Central Bank (ECB) and is designed to provide a transparent, reliable, and representative reference rate for the euro money market.

Introduced in October 2019, EURSTR replaced the EONIA (Euro Overnight Index Average) as the ECB's official benchmark for overnight unsecured euro interest rates. It is calculated based on a wide pool of data from multiple banks across the euro area, capturing the actual transactions in the unsecured overnight money market. The rate is determined using a robust, transaction-based methodology that aims to minimize the influence of outliers and market anomalies.

EURSTR serves as an essential reference for a variety of financial contracts, including derivatives, loans, and other financial instruments. Its transparency and robustness align with international standards for benchmark rate administration and contribute to market stability.

The calculation process involves an elaborate data collection from participating banks, including transaction data and other relevant information. The rate is published each business day at 8:00 a.m. CET, offering market participants a reliable indicator of prevailing short-term rates in the euro area.

EURSTR's adoption aligns with global financial reform efforts to enhance the integrity of benchmark interest rates and reduce reliance on less transparent or potentially manipulated rates. Its development reflects ongoing initiatives to establish more robust financial benchmarks that support the stability and transparency of financial markets within the eurozone.