Key Euribor rate falls as ECB mulls policy options

Thu Feb 27, 2014 5:13am EST

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(ADVISORY: From March 1, 2014, Reuters news will no longer send
systematic alerts or tables on daily Euribor fixings. At the
instruction of the European Banking Federation, client access to
that day's Euribor fixes will require a fee from next month.
Details of this change to a fee liable service can be found on
DN072425 and on the EBF website here.
 Reuters will alert and write news stories on significant or
newsworthy moves in Euribor rates on merit from that date.) 
    
FRANKFURT, Feb 27 (Reuters) - The key euro-priced bank-to-bank
lending rate fell on Thursday as the European Central Bank
considers its options to deal with low inflation and weak growth
ahead of its policy meeting next week. 
    "We are reflecting 360 degrees on everything," Yves Mersch,
who sits on the six-member Executive Board that forms the
nucleus of the ECB Governing Council, said on Wednesday.
    ECB President Mario Draghi said after the February meeting
the central bank had decided not to act while it acquired more
information on the growth and inflation outlook and assessed the
impact of emerging market turmoil on the euro zone.
    The ECB, which holds its next policy meeting on March 6, has
set out two scenarios that could trigger fresh policy action: a
deterioration in the medium-term inflation outlook and an
"unwarranted" tightening of short-term money markets.
    Excess liquidity, or the amount of money banks
have beyond what they need for their day-to-day operations,
inched up to about 119 billion euros, still near the lowest
level since December 2011. 
    On Thursday, the three-month Euribor rate,
considered the main gauge of unsecured bank-to-bank lending,
ticked down to 0.286 percent from 0.288 percent. The rate has
traded in a narrow band of 0.286 to 0.290 percent this month.
    The six-month Euribor rate fell to 0.384
percent from 0.387 percent while the shorter-term one-week rate
 decreased to 0.187 percent from 0.194 percent.
    The EONIA overnight lending rate on Wednesday
inched up to 0.168 percent from 0.166 percent the previous
session.
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
    For a package of graphics on the ECB, click on:     
    link.reuters.com/neg32s   
    For graphic of euro zone liquidity levels click:       
    link.reuters.com/qeq25s 
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
    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       

 (Reporting by Frankfurt newsroom)
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