February 18, 2014 / 10:32 AM / in 4 years

Key Euribor rate up with Nowotny cool on negative deposit rate

FRANKFURT, Feb 18 (Reuters) - The key euro-priced
bank-to-bank lending rate edged up on Tuesday after a European
Central Bank policymaker said he was sceptical about the ECB's
lowering its deposit rate into negative territory.
    Cutting below zero the deposit rate the ECB pays banks for
holding their money overnight is one of the options the central
bank has discussed to help money flow more evenly across the
euro zone. 
    But Governing Council member Ewald Nowotny said late on
Monday such a move may fail to stimulate more lending and could
have an adverse psychological effect. 
    The three-month Euribor rate, considered the
main gauge of unsecured bank-to-bank lending, rose to 0.288
percent on Tuesday from 0.287 percent.
    The six-month Euribor rate was unchanged, at
0.386 percent. The shorter-term one-week rate rose
to 0.190 percent from 0.188 percent.
    Excess liquidity, or the amount of money banks
have beyond what they need for their day-to-day operations,
eased to 150 billion euros. The EONIA overnight lending
rate rose to 0.150 percent on Monday from 0.144 percent in the
previous session.
    In January, ECB President Mario Draghi said an unwarranted
increase in short-term-money market rates and a worsening of the
medium-term outlook for inflation could trigger more policy
action. 
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
    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'  
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 (Reporting by Frankfurt newsroom; Editing by Larry King)

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