FRANKFURT, Jan 24 The key euro-priced
bank-to-bank lending rate remained unchanged on Friday, easing
pressure on the European Central Bank to intervene as banks
adjusted their liquidity holdings.
Higher demand in the ECB's main refinancing operation and a
partially failed withdrawal of money the ECB spent on its old
bond-purchase programme added close to 50 billion euros of extra
liquidity to the markets this week, sending overnight rates
Overnight Eonia fell back below the ECB's main
refinancing rate of 0.25 percent that banks pay when they borrow
at the central bank's still-unrestricted lending operations.
It stood at 0.210 percent on Thursday, down from 0.238
percent in the previous session, after rising above the main
refinancing rate for several sessions earlier.
Excess liquidity - money banks have beyond what
they need for their day-to-day operations - stood at 161 billion
euros on Friday, having hit 125 billion euros this week, the
lowest level since September 2011.
This was just before the ECB pumped more than 1 trillion
euros into the financial system two years ago. Almost half of
the crisis loans have already been paid back voluntarily and
banks are expected to return another 1.8 billion next week.
The short-term rate spikes had put pressure of the ECB to
step in as a rise in short-term rates effectively tightens
monetary conditions and if this happens too quickly, it can
derail the recovery, potentially pushing the euro zone's already
sub-target inflation even lower.
The ECB pledged earlier this month to act should the rise in
bank-to-bank lending rates that underpin borrowing costs across
the economy became "unwarranted".
On Friday, the three-month Euribor rate,
traditionally the main gauge of unsecured bank-to-bank lending,
remained at 0.300 percent.
The six-month Euribor rate fell to 0.401
percent from 0.404 percent and the shorter-term one-week rate
decreased to 0.211 percent from 0.213 percent.
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
(Reporting by Frankfurt newsroom; Editing by Alison Williams)