Euro 3-mth Libor rate hits record low; dollar rate steady

LONDON, Oct 5 (Reuters) - The interbank cost of borrowing
euros for three-months fell to a record low on Monday, pushed
lower by expectations that interest rates will stay low and the
markets remain flush with liquidity for some time.

The equivalent rate for dollars was steady compared with
Friday, while the sterling rate rose, though both stayed close
to record lows, according to the latest daily fixing from the
British Bankers' Association.

Key three-month Libor rates had come off record lows last
week as the fixing took in the year-end period for the first
time and after the European Central Bank allocated a
lower-than-expected 75 billion euros in its latest tender of
one-year funds.

The spread of three-month London interbank offered rates
over OIS rates for dollars narrowed 1 basis point to 14 bps,
while the euro spread narrowed by 2 basis points to 29 bps. The
sterling spread narrowed by 2 basis points to 17 bps.

The spread expresses the three-month premium paid over
anticipated central bank rates, or Overnight Index Swap rates
and is seen as a gauge of banks' willingness to lend to each
other -- a wider spread is seen as an indication of decreased
inclination to lend.

Below is a table of the London interbank offered rates
(Libor) for dollar, euro and sterling funds in percentage terms,
with the change from the previous session in parentheses.

EURO STERLING DOLLAR
O/N 0.27575 (-0.00500) 0.50250 (+0.00000) 0.20250 (+0.00250)
1WK 0.31750 (-0.00375) 0.50500 (+0.00250) 0.23625 (+0.00062)
2WK 0.33250 (-0.00375) 0.50375 (+0.00000) 0.24063 (+0.00000)
1MO 0.38750 (-0.00250) 0.50250 (+0.00125) 0.24438 (+0.00000)
2M0 0.54063 (-0.00812) 0.50938 (+0.00313) 0.25313 (+0.00063)
3MO 0.69375 (-0.00375) 0.54750 (+0.00625) 0.28406 (+0.00000)
6MO 0.99313 (-0.00375) 0.73375 (-0.00063) 0.60188 (-0.00125)
1YR 1.22313 (-0.00250) 1.09063 (-0.00312) 1.20688 (-0.00562)

3MTH LIBOR/OIS SPREAD (BPs)

29 (-2bps) 17 (-2 bps) 14 (-1bps)

For RICs to the above rates, go to <0#LIBORSUPERRICS>.

(Reporting by Jessica Mortimer)