FRANKFURT, Feb 21 The key euro-priced bank-to-bank lending rate inched higher on Friday as the amount of money banks have beyond what they need for their day-to-day operations fell to the lowest level since December 2011. That was just before the ECB flooded the market with more than 1 trillion euros ($13.71 trillion) in cheap loans to ease banks' funding strains, which pushed the level of excess liquidity to as high as around 800 billion euros in early 2012. On Friday, it stood at 121 billion euros. Banks have started to repay the crisis loans, relying less on the central bank for funding in a sign of returning confidence. This development exerts upwards pressure on interbank lending rates. On Friday, the three-month Euribor rate, considered the main gauge of unsecured bank-to-bank lending, inched up to 0.287 percent from 0.286 percent. The six-month Euribor rate stayed 0.384 percent. The shorter-term one-week rate remained unchanged at 0.192 percent. The EONIA overnight lending rate rose to 0.169 percent on Thursday from 0.164 percent in the previous session. ECB Executive Board member Benoit Coeure last week described the situation on money markets as a kind of normalisation, saying market participants were learning to adapt to an environment with a lower level of excess liquidity. But the ECB remains vigilant and said it would intervene in case of an unwarranted increase in short-term money market rates or a worsening of the medium-term outlook for inflation. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 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 ($1 = 0.7293 euros) (Reporting by Frankfurt newsroom; Editing by Toby Chopra)
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