Euribor rate steady as ECB stands by to watch recovery unfold
FRANKFURT, Sept 9 (Reuters) - The key Euribor bank-to-bank lending rate was unchanged on Monday as the European Central Bank watches how the economic recovery in the euro zone unfolds before deciding on any possible fresh policy action. The bank left its key interest rate unchanged at 0.5 percent on Thursday, as expected by all 60 economists polled by Reuters. But ECB President Mario Draghi said the policymaking Governing Council discussed a possible rate cut at its monthly meeting, partly due to concern about money market rates and the uncertain nature of the recovery. "If money market developments were to be judged unwarranted in their impact on our assessment of medium-term inflation, then such an instrument should be considered," he told a news conference, stressing that the ECB has a downward bias on rates. "We stand ready to act," he added. Money markets shrugged off the ECB's latest efforts to halt the rise in bank-to-bank borrowing costs. Market rates have been pushed up by a run of solid economic data and the prospect of the U.S. Federal Reserve unwinding its stimulus. The three-month Euribor rate, traditionally the main gauge of unsecured bank-to-bank lending, was unchanged on Monday, at 0.225 percent. The six-month Euribor rate fell slightly to 0.342 percent from 0.344 percent, while the one-week rate stayed at 0.098 percent from 0.097 percent. The overnight Eonia rate inched up on Friday to 0.075 percent from 0.069 percent. Excess liquidity in the euro zone banking sector stood at 244 billion euros, still high enough to keep short-term market rates below the ECB's refinancing rate. The ECB said in its July monthly bulletin that as long as excess liquidity "remains above a certain threshold, estimated to be in the range of 100 billion to 200 billion euros, short-term money market rates are expected to stay slightly above the deposit rate". A Reuters poll of euro traders showed last week they did not expect any new steps from the ECB to prevent money market rates from rising closer to the refinancing rate, currently at 0.5 percent. 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 (Reporting by Frankfurt newsroom)
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