At 1.25% at the moment, our rate on refinancing operations is higher than the federal funds rate target range of 0-0.25%. But owing in particular to the very low rate on our deposit facility of 0.25%, this difference in policy rates does not translate into equivalent differences in money market rates.
In the euro area, six-month and twelve-month euro interbank offered rates are important benchmarks, which are widely used by banks to set floating rate loans to households and companies, for example, for setting mortgage rates in countries such as Spain. These sixand twelve-month rates are actually slightly lower in euros than the corresponding rates for contracts denominated in US dollars.