September 25, 2019 / 8:29 AM / a month ago

ECB rate cut fully priced in by new benchmark ESTR: Coeure

FRANKFURT, Sept 25 (Reuters) - The European Central Bank’s new benchmark rate for inter-bank lending, ESTR, has fully priced in the ECB’s latest cut, showing money markets in the euro zone are working well, ECB board member Benoit Coeure said on Wednesday.

“We were all glad to see that the ESTR responded exactly as expected and the rate cut was fully priced through,” Coeure told a event ahead of ESTR’s launch next week.

“We have a very smooth and stably money market, which is nice to see.”

The ECB’s new Euro short-term rate (ESTR) is currently in test phase and will be go live on Oct. 1. It settled at -0.553% on Wednesday, reflecting overnight lending activity in the banking sector on the previous day. (Reporting By Francesco Canepa Editing by Balazs Koranyi)

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