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Key Euribor rate ticks down ahead of crunch ECB meeting
February 6, 2014 / 10:22 AM / in 4 years

Key Euribor rate ticks down ahead of crunch ECB meeting

FRANKFURT, Feb 6 (Reuters) - The key euro-priced
bank-to-bank lending rate eased after a drop in inflation and a
fall in excess liquidity fed expectations the European Central
Bank may take fresh policy action as soon as Thursday.
    Euro zone inflation eased to 0.7 percent last month,
slipping far below the ECB's target of just under 2 percent. The
drop fuelled expectations the ECB may take action at Thursday's
policy meeting, or next month. 
    Excess liquidity, or the amount of money banks have beyond
what they need for their day-to-day operations, fell to levels
that last month sparked volatility in interbank lending rates.
    Excess liquidity dropped to 144 billion euros
after the settlement of two ECB operations.
    An "unwarranted" tightening of short-term money markets was
one scenario ECB President Mario Draghi set out after the
January meeting that could trigger policy action. The other was
a deterioration in the medium-term inflation outlook.
    The vast majority of 24 traders polled by Reuters said they
did not expect the ECB to take its refinancing rate lower than
the current 0.25 percent on Thursday or make any moves that
could increase money supply and boost inflation. 
    The three-month Euribor rate, traditionally
the main gauge of unsecured bank-to-bank lending, fell for the
seventh session in a row, to 0.286 percent from 0.287 percent.
    The six-month Euribor rate decreased to 0.385
percent from 0.386 percent while the shorter-term one-week rate
 eased to 0.186 percent from 0.189 percent.
    The EONIA overnight lending rate rose to 0.145
percent on Wednesday from 0.133 percent on Tuesday.
    Spikes in overnight lending rates earlier this year had put
pressure on the ECB to step in and curb the rise, which if it
happens too quickly could even derail the recovery.
    For a package of graphics on the ECB, click on:   
    For graphic of euro zone liquidity levels click:   
    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)

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