Key Euribor rate dips after Draghi says market rates unwarranted
FRANKFURT, Sept 13 (Reuters) - The benchmark Euribor bank-to-bank lending rate fell on Friday after European Central Bank President Mario Draghi said a recent rise in money market rates was "unwarranted". Draghi said on Thursday that the recovery was still "very, very green" and he reiterated that the ECB was not running out of policy options. His comments came a week after the ECB left its main interest rate unchanged at 0.5 percent, though Draghi said policymakers had discussed a rate cut, partly due to concern about money market rates and the uncertain nature of the economic recovery. Estonia's central bank governor, Ardo Hansson, told Reuters on Wednesday that the launch of another longer-term refinancing operation (LTRO) was as an option "on the table", but that the current policy stance was appropriate for now. The three-month Euribor rate, traditionally the main gauge of unsecured bank-to-bank lending, dipped on Friday to 0.223 percent from 0.224 percent. The six-month Euribor rate edged up to 0.342 percent from 0.341 percent, while the one-week rate was steady at 0.096 percent. The overnight Eonia rate fell on Thursday to 0.068 percent from 0.073 percent. Excess liquidity in the euro zone banking sector stood at 240 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". Draghi said last week, however, that there was no stable relationship between excess liquidity and market rates. A Reuters poll of euro traders last week showed 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; Editing by Susan Fenton)
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