June 5, 2012 / 9:22 AM / 5 years ago

Euribor rates slide as ECB meeting nears

 FRANKFURT, June 5 (Reuters) - Euro zone bank-to-bank lending
rates hit fresh two-year lows on Tuesday, weighed down by a
growing belief the ECB will have to cut interest rates and keep
its liquidity taps open to full to help shore up the euro zone's
teetering economy and its banks.	
 The European Central Bank, which is under growing pressure
to cut interest rates when it meets on Wednesday (for story
click ), has helped halve interbank lending rates
this year by providing banks with more than 1 trillion euros
($1.25 trillion) of ultra-cheap three-year funding.	
 Extending a near-vertical six-month drop, three-month
Euribor rates, traditionally the main gauge of
unsecured interbank euro lending, inched down to 0.663 percent
from 0.664 percent.	
 Six-month Euribor rates also hit new two-year
lows, dropping to 0.940 percent from 0.941 percent. One-year
rates fell to 1.223 percent from 1.224 percent.	
 Shorter-term rates were more mixed. One week rates
 remained at 0.318 percent while overnight rates
 fixed at 0.332 percent on Monday, down from 0.337
 Dollar-priced three-month bank-to-bank Euribor lending rates
 , were also steady, staying at 0.970
percent. Overnight rates dropped to 0.313 percent
from 0.317 percent.	
 The sharp fall in euro-priced interbank rates over the last
half a year has brought benchmark euro-priced three-month rates
to within touching distance of the euro-era low of 0.634 percent
hit in early 2010.	
 The 0.25 percent the ECB offers banks for overnight deposits
continues to act as a floor for money market rates as banks know
they can get that level of interest no matter what. Some
analysts expect the ECB to cut the deposit rate as well later
this year.	
 High excess liquidity in the banking system - now at 769
billion euros according to Reuters calculations -
has led to heavy use of the ECB's overnight deposit facility,
where banks parked 781 billion euros overnight. In normal times
the amounts are minimal.	
 Euribor rates are fixed daily by the Banking Federation of 
the European Union (FBE) shortly after 0900 GMT.	
 * For a table of the latest Euribor fixings for terms of one
week to one year, double click on 	
 * For a table of the previous day's fixings of EONIA swap 
rates, which show market expectations for future overnight 
lending rates, double click on 	
 * For graphs of historic Euribor and EONIA swap rates, right
click on the links in angle brackets below, and select 'Related 
 1 week       	
 2 week       	
 3 week       	
 1 month      	
 2 month      	
 3 month      	
 4 month      	
 5 month      	
 6 month      	
 7 month      	
 8 month      	
 9 month      	
 10 month    	
 11 month    	
 1 year       	
 (Reporting by Frankfurt newsroom)	

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