Key Euribor rate steady as Nowotny gives upbeat growth outlook
FRANKFURT, Jan 14 (Reuters) - The key euro-priced bank-to-bank lending rate held steady on Tuesday after a European Central Bank policymaker gave an upbeat outlook for the euro zone, minimising the need for further policy action. Ewald Nowotny said on Tuesday the currency bloc might grow stronger this year than so far expected, citing potentially strong performances by euro zone member states Germany and Austria for example. The Austrian central bank governor also said that it was a positive sign that banks were repaying early the long-term loans they took from the ECB in late 2011 and early 2012 to ride out a period of strained funding conditions. The repayments will resume this week after pausing over the turn of the year to avoid a liquidity squeeze. On Friday, the ECB said banks would return 2.566 billion euros ($3.50 billion)on Wednesday, which was less than expected in a Reuters poll. This means that the recent drop in excess liquidity , or money banks have beyond what they need for their day-by-day operations, will slow down. It stood at 155 billion euros on Tuesday compared with 159 billion previously. The amount had risen to over 280 billion euros towards the end of last year as banks increased their liquidity buffers to avert year-end money market tension. As the new year got on its way, excess liquidity came back down, which increased upward pressure on money market rates. But the ECB renewed pledge to fight further falls in inflation or an unwarranted rise in money market rates soothed concerns that tighter monetary conditions could hamper the euro zone's weak recovery. On Tuesday, the three-month Euribor rate, traditionally the main gauge of unsecured bank-to-bank lending, was unchanged at 0.282 percent. The six-month Euribor rate rose to 0.390 percent from 0.389 percent and the shorter-term one-week rate dipped to 0.174 percent from 0.175 percent. Overnight Eonia inched lower to 0.153 percent on Monday from 0.154 percent in the previous session. 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 Graph' 1 week 2 week 1 month 2 month 3 month 6 month 9 month 1 year ($1 = 0.7353 euros) ($1 = 0.7314 euros) ($1 = 0.7324 euros) (Reporting by Eva Taylor)
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