ESTR = Euro Short-Term Rate

ESTR (Euro Short-Term Rate) is the overnight interest rate benchmark for the euro area, published by the European Central Bank (ECB). It replaced EONIA (Euro Overnight Index Average) as the primary risk-free rate (RFR) for euro-denominated derivatives and financial contracts.

ESTR reflects the wholesale unsecured overnight borrowing costs of euro area banks.

It is based on real transactions in the money market, reported by banks in the Money Market Statistical Reporting (MMSR) framework. 

- Published daily by the ECB at 08:00 CET on the next business day.
- Based on transactions from the previous business day.

Use Cases:

- Benchmark rate for interest rate derivatives (e.g., swaps, futures, options).
- Reference rate for floating rate notes (FRNs) and structured products.
- Discounting and collateral management in euro-denominated financial markets.