UPDATE 1-Year-long fall in Euribor rates fades
(Updates with Libor fixing) FRANKFURT/LONDON, Nov 16 (Reuters) - Key Euribor bank-to-bank lending rates remained steady on Friday, finding fresh support after a year-long downtrend under the weight of excess liquidity in the banking system. Bank-to-bank lending rates have fallen sharply since last November when European Central Bank plans emerged to flood the banking system with ultra-cheap, three-year cash. But they have been showing signs of stabilising this month as the impact of the excess liquidity has been largely priced in, and due to uncertainty about whether the ECB will cut interest rates further. The ECB has maintained interest rates at a record low of 0.75 percent, and ECB President Mario Draghi, speaking after a policy meeting last week, declined to comment when asked whether markets were right to expect a cut next month. Three-month Euribor rates, traditionally the main gauge of unsecured bank-to-bank lending, were unchanged on Friday at 0.191 percent. The three-month rate has begun to find some support just below 0.2 percent this month. The equivalent Libor rate, fixed by a smaller panel of banks in London, was 0.12643 percent, compared with Thursday's 0.12571 percent. For other Libor rates see The six-month rate dipped to 0.356 percent from 0.357 percent and the one-week rate was unchanged at 0.078 percent. The overnight Eonia rate inched up to 0.078 percent from 0.077 percent. Dollar-priced bank-to-bank Euribor lending rates were mixed, with three-month rates rising to 0.61538 percent from 0.60077 percent and one-week rates falling to 0.29846 percent from 0.30000 percent. The ECB's decision in July to stop paying interest on overnight deposits paved the way for further declines in euro-denominated rates by removing the 0.25 percent floor for the money market. The amount of excess cash in the euro zone banking system is extremely high at about 666 billion euros, according to Reuters calculations. With that figure set to remain high for the foreseeable future, money market experts have focused on whether the ECB could copy Denmark's example and start charging banks to deposit cash overnight. Policymakers showed initial interest in the idea but some have since expressed reservations. Governing Council member Ewald Nowotny said last month a negative deposit rate was not realistic. Asked about the idea last Thursday, Draghi said: "We haven't discussed (that)." 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 Graph' 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 ($1 = 0.7867 euros) (Reporting by Frankfurt newsroom; Editing by Catherine Evans)
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