February 28, 2014 / 10:22 AM / 4 years ago

Key Euribor rate holds steady as ECB mulls policy options

(ADVISORY: From March 1, 2014, Reuters news will no longer send
systematic alerts or tables on daily Euribor fixings. At the
instruction of the European Banking Federation, client access to
that day's Euribor fixes will require a fee from next month.
Details of this change to a fee liable service can be found on
DN072425 and on the EBF website here.
 Reuters will alert and write news stories on significant or
newsworthy moves in Euribor rates on merit from that date.) 
FRANKFURT, Feb 28 (Reuters) - The key euro-priced bank-to-bank
lending rate was unchanged on Friday as the European Central
Bank considers its options for dealing with low inflation and
weak growth ahead of its policy meeting next week.
    ECB President Mario Draghi said late on Thursday the euro
zone is not experiencing deflation, but that the central bank is
alert to potential downside risks to price stability and will
act if needed. 
    Earlier on Thursday, Governing Council member Bostjan Jazbec
said the ECB will look next week at whether an interest rate cut
is the right tool for the current situation and whether it would
be enough. 
    ECB Executive Board member Yves Mersch said earlier this
week the Governing Council was "reflecting 360 degrees on
everything", referring to the ECB's monetary policy. 
    Draghi said after the February meeting the central bank had
decided not to act while it acquired more information on the
growth and inflation outlook and assessed the impact of emerging
market turmoil on the euro zone.
    The ECB, which holds its next policy meeting on March 6, has
set out two scenarios that could trigger fresh policy action: a
deterioration in the medium-term inflation outlook and an
"unwarranted" tightening of short-term money markets.
    Excess liquidity, or the amount of money banks
have beyond what they need for their day-to-day operations,
inched up to about 119 billion euros ($162.81 billion), still
near the lowest level since December 2011. 
    On Friday, the three-month Euribor rate,
considered the main gauge of unsecured bank-to-bank lending, was
held steady at 0.286 percent. The rate has traded in a narrow
band of 0.286 to 0.290 percent this month.
    The six-month Euribor rate was also unchanged,
at 0.384 percent, while the shorter-term one-week rate
 fell to 0.184 percent from 0.187 percent.
    The EONIA overnight lending rate on Thursday inched
down to 0.162 percent from 0.168 percent the previous session.
    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       

($1 = 0.7309 euros)

 (Reporting by Frankfurt newsroom)
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