What Is €STR?

€STR — the euro short-term rate — is the benchmark interest rate for euro-denominated wholesale funding markets. Administered and published by the European Central Bank (ECB), €STR reflects the unsecured overnight borrowing costs of banks located in the euro area.

The ECB began publishing €STR on 2 October 2019, reflecting trading activity from 1 October 2019. It replaced EONIA (Euro OverNight Index Average) as the euro area's risk-free rate, with EONIA discontinued entirely on 3 January 2022 after a roughly two-year transition period during which EONIA was calculated as a fixed 8.5 basis point spread over €STR.

Like SOFR and SONIA, €STR was introduced because regulators wanted a benchmark grounded in real, observable transactions rather than the estimates and expert judgment that underpinned older benchmarks such as EONIA and LIBOR.

How Is €STR Calculated?

The ECB calculates €STR each TARGET2 business day using data reported by banks under the EU's Money Market Statistical Reporting (MMSR) regulation. Eligible transactions must be:

Unsecured overnight deposits (no collateral pledged)
At least €1 million in size
Borrowing transactions conducted with financial counterparties (banks, money market funds, insurers, and other financial institutions)

From this pool, the ECB computes a volume-weighted trimmed mean, discarding the top and bottom 25% of volume before averaging the remainder. This trimming reduces the influence of outlier trades on the published rate.

€STR is published at 08:00 CET each TARGET2 business day, based on transactions conducted and settled on the previous business day (reporting date "T", with a maturity of T+1). The ECB does not charge for €STR or license its use, which has helped it become the standard reference rate across euro money markets, loans, and derivatives.

€STR vs EURIBOR: Key Differences

Feature	€STR	EURIBOR
Basis	Unsecured overnight deposits	Unsecured term interbank lending
Source	Real transactions (MMSR reporting)	Panel bank submissions with transaction-based methodology
Term structure	Overnight only (Term €STR available via CME)	Built-in tenors (1W, 1M, 3M, 6M, 12M)
Publication	End-of-day, reflects prior day's activity	Set at the start of the interest period
Administrator	European Central Bank	European Money Markets Institute (EMMI)
Typical use	Compounded-in-arrears loans, derivatives, EURIBOR fallback	Term loans, mortgages, corporate lending

Because €STR is an overnight rate, most loan agreements that reference it use compounded €STR in arrears, similar to how SOFR is used in USD loans. EURIBOR, by contrast, remains widely used in euro lending because it still provides a forward-looking term rate that borrowers know at the start of the interest period.

€STR and the ECB's Policy Rates

€STR typically trades a few basis points below the ECB's deposit facility rate, since both reflect conditions in the same unsecured overnight funding market. This relationship makes €STR a useful real-time signal of where short-term euro funding costs actually sit relative to policy.

That relationship is worth watching closely right now. On 11 June 2026, the ECB's Governing Council raised its three key interest rates by 25 basis points, with effect from 17 June 2026:

Rate	New Level
Deposit facility rate	2.25%
Main refinancing operations rate	2.40%
Marginal lending facility rate	2.65%

The ECB attributed the move to inflation pressures generated by the war in the Middle East, noting the decision was "robust across a range of scenarios" for how the shock might evolve. In its updated staff projections, the ECB now expects headline inflation to average 3.0% in 2026, 2.3% in 2027, and 2.0% in 2028 — an upward revision from March, driven mainly by a higher path for energy prices. The Governing Council said it is not pre-committing to a further rate path and will proceed on a meeting-by-meeting, data-dependent basis.

Consistent with its usual spread to the deposit facility rate, €STR was fixed at 2.182% for the 7 July 2026 reference date (published 8 July 2026) — a few basis points below the new 2.25% deposit facility rate. Borrowers and lenders on €STR-linked facilities should expect this pass-through to continue tracking ECB policy moves closely, given how directly €STR is tied to the overnight deposit market the ECB's rate decisions target.

How €STR Is Used in Loans

Most euro-denominated syndicated and commercial loans that reference €STR use compounded €STR in arrears: daily overnight €STR fixings are compounded over the interest period, with the total interest cost known only near the end of that period. A lookback period (commonly five TARGET2 business days) shifts rate observations earlier, giving borrowers and lenders time to calculate the interest bill before the payment date.

€STR-linked euro loans generally use an Actual/360 day count convention, consistent with other euro money market instruments.

€STR also serves as the recommended fallback for EURIBOR-referencing contracts. The working group on euro risk-free rates has recommended either a direct fallback to compounded €STR in arrears, or a two-level waterfall that falls back first to a forward-looking Term €STR (published by CME Group) and then to compounded €STR in arrears if Term €STR is unavailable.

Key Dates

1 October 2019 — €STR first published (reflecting 1 October 2019 trading)
2 October 2019 – 3 January 2022 — Transition period, with EONIA recalibrated as €STR + 8.5 bps
3 January 2022 — EONIA permanently discontinued
11 June 2026 — ECB raises key rates by 25 bps, citing inflation pressure from the war in the Middle East

Calculate Your €STR Loan

Use our free RFR Loan Calculator to calculate interest on any €STR-based loan — compounded in arrears — with a full daily rate ledger and Excel export.