Key Euribor rate rises as banks repay crisis loans early

Tue Dec 3, 2013 5:34am EST

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FRANKFURT, Dec 3 (Reuters) - The key euro-priced
bank-to-bank lending rate rose on Tuesday, extending gains after
the European Central Bank said banks will return more of their
crisis loans to the ECB than expected.
    Prospects have also waned for further policy easing by the
ECB at its meeting on Thursday, putting upward pressure on
short-term market rates and sending the main euro-priced
bank-to-bank lending rate higher for the fourth session running.
    On Friday, the ECB said banks would return 7.2 billion euros
($9.76 billion) this week to the central bank, above the 4.5
billion average in a Reuters poll of money-market traders. The
money will be paid back on Wednesday. 
    The early repayment will reduce excess liquidity
, the amount of money in the market beyond what
banks need for their day-to-day operations.
    A lower level of excess liquidity, currently at 190 billion
euros, is starting to put upward pressure on market rates.
Excess liquidity was above 800 billion euros early last year.
    In the run-up to this week's ECB policy meeting, several
senior policymakers have played down the prospect of the bank
embarking on fresh policy action to aid recovery in the euro
zone economy, where inflation is running well below target.
    On Tuesday, the three-month Euribor rate,
traditionally the main gauge of unsecured bank-to-bank lending,
rose to 0.239 percent from 0.236 percent.
    The six-month Euribor rate edged up to 0.332
percent from 0.331 percent while the one-week rate 
rose to 0.127 percent from 0.124 percent. On Monday, the
overnight Eonia rate fell to 0.112 percent from 0.277
    Euribor rates are fixed daily by the Banking Federation of 
the European Union (FBE) shortly after 1000 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
    1 week       
    2 week       
    1 month      
    2 month      
    3 month      
    6 month      
    9 month      
    1 year       

($1 = 0.7377 euros)

 (Reporting by Frankfurt newsroom; Editing by Catherine Evans)
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