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Key Euribor rate falls after dovish ECB talk
October 23, 2013 / 9:41 AM / 4 years ago

Key Euribor rate falls after dovish ECB talk

FRANKFURT, Oct 23 (Reuters) - Key euro-priced bank-to-bank
lending rate ticked down on Wednesday after a European Central
Bank policymaker indicated the central bank could engage in more
policy action due to low inflation.
    Luc Coene, ECB Governing Council member and head of the
Belgian central bank, said on Tuesday that a further fall in
inflation could warrant monetary policy action. 
    On Wednesday, the three-month Euribor rate,
traditionally the main gauge of unsecured bank-to-bank lending,
decreased to 0.222 percent from 0.223 percent.
    The one-week rate rose to 0.100 percent from
0.099 percent, while the six-month Euribor rate 
remained at 0.340 percent. The overnight Eonia rate 
fixed on Tuesday at 0.093 percent, up from 0.091 percent.
    Excess liquidity in the euro zone banking
sector - the amount of money in the market over and above what
the banking system needs to function - was at 204 billion euros,
close to its lowest level since late 2011, before the ECB
flooded markets with over 1 trillion euros of long-term loans.
    Short-term money market rates are expected to rise closer to
the ECB's main refinancing rate, currently at 0.5 percent, once
excess liquidity in the system falls below a threshold estimated
to be in the range of 100 billion to 200 billion euros.
    The central bank, however, has said it is prepared to pump
more long-term cheap cash into the banking system or even start
charging banks to keep spare cash at the ECB, if market rates
rise too quickly for comfort.
    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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