The temporary change in the remuneration ceiling for government deposits gives government deposit holders extra time to undertake a smooth and gradual return of their deposits to the market. From the ECB’s perspective, it remains the case that encouraging market intermediation of these deposits remains desirable in the long term.
In the meantime, the temporary change will allow us to assess the adjustments of money markets across market segments to the return to positive interest rates and thereby also reduce uncertainty about the pass-through of the changes in the ECB interest rates to money markets.