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Key Euribor rate falls after excess liquidity rises
January 23, 2014 / 10:17 AM / in 4 years

Key Euribor rate falls after excess liquidity rises

FRANKFURT, Jan 23 (Reuters) - The key euro-priced
bank-to-bank lending rate ticked down on Thursday after the
European Central Bank pushed more cash into the money markets.
    Higher demand in the ECB's main refinancing operation and a
partially failed sterilisation of bond buys injected close to 50
billion euros of extra money into the markets on Wednesday,
sending market rates down.
    On Thursday, the three-month Euribor rate,
traditionally the main gauge of unsecured bank-to-bank lending,
fell to 0.300 percent from 0.301 percent.
    The six-month Euribor rate fell to 0.404
percent from 0.406 percent and the shorter-term one-week rate
 decreased to 0.213 percent from 0.216 percent.
    Overnight Eonia decreased on Wednesday to 0.238
percent from 0.351 percent the previous session.    
    Excess liquidity - money banks have beyond what
they need for their day-to-day operations - rose to 171 billion
euros from 125 billion the previous day. 
    The ECB is following the latest developments in money
markets closely, having pledged to intervene should the rise in
bank-to-bank lending rates that underpin borrowing costs across
the economy become "unwarranted". 
    A gradual rise in the rates reflects banks beginning to wean
off central bank funding and tapping markets again, a kind of
normalisation, but if the increase accelerates it could threaten
the euro zone's recovery.
    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 week       
    2 week       
    1 month      
    2 month      
    3 month      
    6 month      
    9 month      
    1 year       

 (Reporting by Frankfurt newsroom; Editing by Robin Pomeroy)

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