FRANKFURT, Jan 9 The key euro-priced
bank-to-bank lending rate rose on Thursday after extra liquidity
in the euro zone fell drastically and markets expected the
European Central Bank to keep its policy unchanged later in the
The ECB will announce its interest rate decision at 1245
GMT, followed by a news conference at 1330 GMT.
Banks took 112.5 billion euros ($153 billion) in the ECB's
main weekly refinancing operation - 56 billion euros less than
the week before, when they stocked up for the tense
The ECB also successfully drained funds to offset the full
value of government bonds it still holds from its now-ended
bond-buying programme, after three consecutive failures.
This caused excess liquidity - the amount of
money in the market beyond what banks need for their day-to-day
operations - to fall on Thursday to 157 billion euros from 280
billion euros the day before.
A drop in liquidity is seen pushing up market rates as
lenders rely less on central bank funding, with tension in money
markets easing. But there is also a risk that if rates rise too
quickly they may hold back the fragile recovery.
On Thursday, the three-month Euribor rate,
traditionally the main gauge of unsecured bank-to-bank lending,
rose to 0.282 percent from 0.281 percent.
The six-month Euribor rate ticked up to 0.388
percent from 0.383 percent, while the shorter-term one-week rate
rose to 0.173 percent from 0.171 percent.
Overnight Eonia rose to 0.137 percent on Wednesday
from 0.099 percent the previous day.
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 = 0.7353 euros)
(Reporting by Eva Taylor; Editing by Paul Carrel)