Eonia Rate: Complete Guide for Investors in 2025

The Eonia rate (Euro OverNight Index Average) has long been a central indicator of the European money market. However, it ceased to exist at the beginning of 2022 and was replaced by the €STR (Euro Short-Term Rate), a new interbank reference rate for very short-term euro transactions. This guide details the history of the Eonia, the reasons and methods of its disappearance, the methodology of the €STR, the impact of this transition for investors in 2025, and proposes concrete ways to adapt investment strategies.

Understanding the Eonia: Definition, Functioning, Historical Role

Origin and definition of the Eonia

The Eonia, created in 1999 by the EMMI (European Money Markets Institute), corresponded to the weighted average of interest rates applied on unsecured overnight loans between banks in the eurozone. It was calculated each business day based on the actual transactions made during the day and thus reflected the "overnight" cost of liquidity financing between major European financial institutions.

Utility of the Eonia in European finance

This rate served as a major reference for thousands of financial contracts, including interest rate swaps, variable-rate bonds, money market deposits and placements, derivatives, and many structured products. This made it one of the pillars of the European financial system, both for risk management and for setting loan terms or issuances by companies and states.

Calculation methodology

The Eonia was calculated daily by the EMMI based on actual transactions carried out on the interbank market between large banks, on amounts exceeding one million euros. Each participant declared their overnight lending rates practiced, then a weighted average by volume was published at the end of each TARGET2 day (the real-time gross settlement system of the eurozone).

Factors influencing the Eonia

  • Interbank liquidity: The more banks held excess liquidity, the more the Eonia tended to fall.
  • Monetary policies of the ECB: Variations in key interest rates and ECB refinancing operations immediately impacted the level of the rate.
  • Bank confidence: During periods of financial crisis, increased distrust among banks could lead to a sudden rise in the Eonia.

Evolutions and End of the Eonia: Why and How Did It Disappear?

European regulation and global interbank rate scandals

After the global financial crisis and various scandals involving the manipulation of interbank rates (LIBOR, EURIBOR), the European Union imposed a deep reform of benchmark indices in 2016 (Benchmark Regulation/BMR). At that time, the calculation of the Eonia still relied on voluntary declarations from a limited number of banks, which was no longer considered compliant or sufficiently robust under the new regulations.

Transition phase towards the €STR

In October 2019, a transitional period opened: on one side, the Eonia remained published but its methodology evolved, becoming simply an 8.5 basis point adjustment to the €STR. On the other side, the €STR was introduced by the European Central Bank as the new daily reference money market rate, calculated from a much larger and more transparent sample of transactions.

Official End Date for Eonia

The publication of the Eonia definitively ceased on January 3, 2022. Its last published level was -0.505% on December 31, 2021. Since then, the €STR has become the sole short-term reference rate in the eurozone for all new transactions, with existing contracts needing to be converted or reindexed onto this new benchmark.

The €STR (Euro Short-Term Rate): New Reference for Money Markets

Definition and Methodology of the €STR

The €STR (short for "Euro Short-Term Rate") is the daily reference interest rate for unsecured overnight euro interbank lending operations between banks and financial institutions. It is calculated and published each day by the European Central Bank, covering the entire eurozone. This rate takes into account all transactions involving amounts over one million euros made the previous day, applying a robust methodology: the lowest and highest 25% of transactions, representing the overall volume, are excluded from the calculation to retain only the representative median of the market.

Fundamental Differences Between Eonia and €STR

  • Data Collection Method: The Eonia relied on voluntary declarations from a small number of banks, while the €STR uses the entirety of transactions reported to the Eurosystem.
  • Type of Operations: The Eonia covered interbank operations exclusively; the €STR also includes transactions between large non-bank financial institutions and banks.
  • Regulatory Robustness: The €STR applies strict calculation criteria compliant with the BMR regulation, which could not be met by the Eonia.
  • Transparency Level: The €STR guarantees much broader transparency and representativeness.

Institutional Distribution: EMMI for Eonia, ECB for €STR

The Eonia was administered until its discontinuation by the EMMI, while the €STR is now exclusively managed by the European Central Bank. This institutional distinction ensures the reliability of historical data and the integrity of current data.

Recent Levels of the €STR

  • On November 3, 2025, the €STR stood at 1.932%.
  • On November 10, 2025, it reached 1.931%.

These rates serve as the primary reference point for all short-term financial products today, replacing the Eonia definitively.

Practical Consequences for Investors in 2025

Effects on Historical Contracts Indexed to Eonia

Nearly 150 billion euros of contracts were initially linked to the Eonia. For contracts with maturities after January 2022 (swaps, loans, lines of credit...), a substitution clause had to be activated to switch the indexing to €STR. Most institutions have updated their management systems. Investments previously denominated in Eonia are now valued based on the €STR, sometimes supplemented by a margin to compensate for the historical average difference between the two rates.

Understanding the Historical Evolution of the Money Market

The Eonia rate has gone through multiple phases since its creation, including:

  • High volatility during the 2008-2010 financial crisis, marked by a spectacular drop and the establishment of near-zero and negative interest rates.
  • A stabilization phase between 2017 and 2019, accompanied by economic recovery and improved interbank liquidity in the eurozone.
  • A transitional period between October 2019 and January 2022 where the Eonia was mechanically indexed on the €STR.

After its disappearance, the market fully adopted the €STR, which continues to follow the evolution of monetary policies and economic expectations.

Challenges in Treasury Management and Valuation

  • Treasury deposit and short-term investment management: All new treasury products are now indexed on the €STR. This simplifies international comparisons and strengthens the legal security of contracts.
  • Interest rate swaps and derivatives: The valuation parameters of financial instruments now reflect the €STR curve, influencing hedging strategies and interest rate risk management.

Investment Strategies Adapted to the €STR Rate

To determine investment choices in 2025, it is necessary to integrate the European monetary cycle and the expectations of central bank benchmark rates, which govern the fluctuations of the €STR. Some concrete strategies include:

  • Bond arbitrages: When the €STR rises, the yield on variable-rate bonds increases, while the return on old fixed-rate bonds becomes relatively less attractive.
  • Market positioning: Short-duration money market funds indexed on the €STR often offer protection against sudden interest rate hikes and guarantee optimal liquidity.
  • Structured products and derivatives: Many structured products built on the €STR allow for cash management diversification or seek performance through options (swaptions, caps, floors, etc.).

Cases Studies: Impact of Interest Rate Changes for an Investor in 2025

An Example of Bond Arbitrage Facing the Rise of the €STR

Consider a government bond with a fixed rate of 3%. If the €STR exceeds 1.93% (level reached in November 2025), the risk premium offered by the bond appears reduced compared to new variable-rate products indexed on the €STR. Investors might therefore prefer recent issues or adapted money market investments to capture a return more aligned with the actual state of the money market.

Risk Management and Treasury Oversight

The disappearance of Eonia, coupled with the widespread adoption of €STR as the reference rate, has strengthened the monitoring of interest rate transformation risk. To secure liquidity while seeking to optimize returns, diversifying funding sources and using contracts with rollover clauses are commonly adopted options.

Interest Rate Monitoring: Why It Is Essential in 2025

  • The ECB regularly adjusts its key interest rates based on inflation and macroeconomic conditions. Any change in monetary policy is quickly reflected in fluctuations of the €STR rate, impacting the cost of credit, the valuation of funds, and the yield of short-term savings accounts.
  • Institutional and professional investors conduct daily monitoring of the evolution of the €STR rate to optimize the management of indexed products and excess cash. This vigilance allows them to anticipate interest rate movements and seize quickly any opportunities for higher yields.

Regulatory Focus and Education on the Transition from Eonia to €STR

Timeline of Regulatory Transition

  • 2016: Adoption of the Benchmark Regulation (BMR) imposing increased standards on all indices used in financial contracts within the European Union.
  • 2019: Announcement of the publication of the €STR by the ECB, coexistence phase and new methodology for Eonia, mechanically linked to the €STR (+8.5 basis points).
  • January 3, 2022: Final cessation of Eonia publication. The €STR becomes the sole official reference for the eurozone.

Which Contracts Were Affected by the Reform?

  • Interest rate swaps
  • Variable-rate loans
  • Club treasury lines
  • Certain daily-indexed bond issues
  • Standard derivatives (futures, options, swaps, etc.)

Necessary Approaches for Investors and Institutions

  • Diagnosis of ongoing contracts to identify those requiring an index substitution.
  • Negotiation of the terms of the switch, possibly including a transition margin, to compensate for the structural difference between Eonia and €STR.
  • IT updates and reporting: review valuation systems, archiving, and administrative tracking.

Focus on the Reliability and Security of €STR

The robustness of the methodology, transparency, and comprehensiveness of the €STR calculation are designed to restore confidence in European money markets. Any investor can consult the daily rate published by the European Central Bank, thus ensuring the verifiability of levels.

Frequently Asked Questions About Eonia, Its Disappearance, and €STR

Does the Eonia Rate Still Exist in November 2025?

No, Eonia has not been published since January 3, 2022. Since that date, no official level of Eonia is available: any recent or prospective mention of an "Eonia rate" is inaccurate. Reference levels on the euro overnight interbank market are now those of the €STR.

What Was the Last Level of Eonia?

The last Eonia rate as of December 31, 2021 was -0.505%.

What is the difference between Eonia and €STR?

Eonia was based on voluntary interbank transactions among a limited panel of banks, whereas the €STR incorporates all non-cleared transactions conducted by all banks and major financial institutions within the Eurozone for amounts exceeding one million euros. As such, the €STR has a broader statistical base, offers better reliability, and meets European regulatory requirements.

How to follow and anticipate changes in the €STR in 2025?

It is recommended to regularly consult official publications from the European Central Bank to obtain the latest €STR rate. Changes are primarily dependent on ECB decisions, levels of inflation, economic growth, and liquidity in the European money market.

Practical Tips for Optimizing Your Monetary Strategy in 2025

  • Renew your old contracts: Check if the indexing on Eonia has been properly converted to the €STR, taking into account any possible substitution margin. This secures the valuation of your investments.
  • Diversify your investments: Choose a combination of money market funds, term deposits, and bonds indexed on the €STR to smooth out interest rate risk and capture market opportunities.
  • Follow European monetary policy: ECB decisions are the main catalysts for changes in the €STR rate. Close monitoring allows anticipation of yield changes and adjustment of cash management allocation strategies.
  • Adjust your treasury tools: Prefer financial products that ensure rapid adaptation of remuneration levels to the €STR (flexible term accounts, overnight placements, interest-bearing current accounts, etc.).

Conclusion: A New Landscape for Investors

The disappearance of Eonia and the rise of the €STR represent one of the most significant regulatory revolutions in the European financial sector over the past decade. This evolution responds to strict requirements for transparency, robustness, and compliance. In 2025, all monetary strategies and treasury practices integrate the €STR as the central indicator for all short-term investment decisions. Understanding this transformation, analyzing the characteristics of the new index, and adopting good management practices are key to optimizing investments in the current context of the European money market.