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Key Euribor rate ticks down as ECB message assessed
September 11, 2013 / 9:18 AM / 4 years ago

Key Euribor rate ticks down as ECB message assessed

FRANKFURT, Sept 11 (Reuters) - The key Euribor bank-to-bank
lending rate fell slightly on Wednesday as investors are
assessing the chances of the European Central Bank taking fresh
policy action in the coming months.  
    The bank left its key interest rate unchanged at 0.5 percent
on Thursday, but ECB President Mario Draghi said the
policymakers discussed a rate cut at its monthly meeting, partly
due to concern about money market rates and the uncertain nature
of the recovery.
    "If money market developments were to be judged unwarranted
in their impact on our assessment of medium-term inflation, then
such an instrument should be considered," Draghi told a news
conference, stressing that the ECB has a downward bias on rates.
    Money markets, however, shrugged off the ECB's latest
efforts to halt the rise in bank-to-bank borrowing costs and are
discounting the chance of a rate cut in the coming months.
    The three-month Euribor rate, traditionally
the main gauge of unsecured bank-to-bank lending, ticked down to
0.224 percent from 0.225 percent.
    The six-month Euribor rate fell slightly to
0.342 percent from 0.343 percent, while the one-week rate
 stayed at 0.098 percent. The overnight Eonia rate
 rose on Tuesday to 0.071 percent from 0.068 percent.
    Excess liquidity in the euro zone banking
sector stood at 246 billion euros, still high enough to keep
short-term market rates below the ECB's refinancing rate.
    The ECB said in its July monthly bulletin that as long as
excess liquidity "remains above a certain threshold, estimated
to be in the range of 100 billion to 200 billion euros,
short-term money market rates are expected to stay slightly
above the deposit rate". 
    Draghi said last week, however, that there was no stable
relationship between excess liquidity and market rates.
    A Reuters poll of euro traders showed last week they did not
expect any new steps from the ECB to prevent money market rates
from rising closer to the refinancing rate, currently at 0.5
    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       
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    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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