Three-month Euribor interbank rate treads water
News Article Date: Monday 12th of October 2009
The three-month rate, traditionally the main gauge of interbank euro lending and a mix of interest rate expectations and banks' appetite for lending, remained at 0.743 percent.
The six-month rate edged up to 1.023 percent from 1.021 percent while the one-year rate increased to 1.247 percent from 1.238 percent. The shorter-term one-week rate inched down to 0.351 percent from 0.352 percent.
Recent ECB lending trends suggest the year-long descent of interbank rates, which began last October, may have bottomed.
The ECB pumped a smaller-than-expected 75 billion euros into money markets at its latest one-year refinancing operation. (For story please click). A further 35.5 billion euros dropped out of the system last week after demand shrivelled for three and six-month ECB funds.
The ECB kept interest rates at record low of 1.0 percent last week as expected, and economists and financial markets expect the next move to be a hike.
ECB also left its deposit rate at 0.25 percent. The rate has acted as a floor for money market rates in recent months due to the massive amounts of excess liquidity the ECB has pumped into the banking system over the financial crisis.
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