Three and six-month Euribor rates sink to record low
News Article Date: Thursday 29th of October 2009
The three-month Euribor bank-to-bank lending rate dipped to a new record low on Wednesday, as excess liquidity from the European Central Bank continued to put downward pressure on longer-term rates.
The three-month rate, traditionally the main gauge of interbank euro lending and a mix of interest rate expectations and banks' appetite for lending, fell to 0.724 percent from a previous low of 0.728 percent.
Yahoo! BuzzThe six-month rate also hit an all-time low, dropping to 1.008 percent from 1.013 percent and the one-year rate fell to 1.238 percent from 1.246 percent.
The shorter-term one-week rate also eased, dropping to 0.352 percent from 0.354 percent.
Interbank rates have experienced a year-long descent due to the ECB's rapid run of official interest rate cuts and its massive injections of liquidity, although recent weeks have pointed to a reduction in excess cash.
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 recently after demand shrivelled for three and six-month ECB funds.
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Post a CommentThe ECB kept interest rates at a record low of 1.0 percent this month as expected, and economists and financial markets expect the next move to be a hike.
The 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.
Euribor rates are fixed daily by the Banking Federation of the European Union (FBE) shortly after 1000 GMT
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