June 21, 2011 / 9:39 AM / 8 years ago

Euribor rates inch up; ECB hike expectations intact

FRANKFURT, June 21 (Reuters) - Key euro-priced bank-to-bank lending rates on Tuesday inched further above the 1.5 percent level they broke though last week as Greece’s worsening debt crisis failed to deflect expectations of an ECB rate hike next month.

The European Central Bank earlier this month signalled it would raise official rates in July, a move economists expect it to follow up with at least one further increase later in the year. [ECB/INT]

ECB policymaker Juergen Stark said on Monday the central bank would do whatever was needed to keep inflation expectations anchored. [ID:nLDE75J1X9]

The rise in market interest rates was accompanied by little change in excess liquidity, at 32.6 billion euros ECBNOMLIQ=.

The three-month Euribor rate EURIBOR3MD= — traditionally the main gauge of unsecured interbank euro lending and a mix of interest rate expectations and banks’ appetite for lending — rose to 1.52 percent from 1.51 percent.

It broke though 1.5 percent last week for the first time in over two years.

One-week Euribor rates EURIBORSWD= rose to 1.31 percent from 1.304 percent and six-month rates EURIBOR6MD= increased to 1.77 percent from 1.764 percent, while 12-month rates EURIBOR1YD= ticked up to 2.146 percent from 2.144 percent.

EONIA overnight interest rates EONIA= dipped to 1.336 percent on Monday from 1.338 percent the previous day.

Whilst flagging a rate hike earlier this month, the ECB also acknowledged the euro zone’s deep-seated debt problems by extending limit-free liquidity provision to banks for another three months [ID:nLDE7580DV].

The ECB is back to its pre-crisis range of funding operations but the debt troubles are preventing it from further normalisation.

Three-month loans are again the longest maturity on offer and banks have now paid back all the six-month and 12-month loans the ECB injected at the height of the turmoil. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For graphic of EONIA trading volumes click here

For graphic of euro zone liquidity levels click r.reuters.com/wer86p ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Euribor rates are fixed daily by the Banking Federation of the European Union (FBE) shortly after 0900 GMT.

* For a table of the latest Euribor fixings for terms of one week to one year, double click on EURIBOR=

* 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 EONIAINDEX

* For graphs of historic Euribor and EONIA swap rates, right click on the links in angle brackets below, and select ‘Related Graph’ 1 week EURIBORSWD= EONIAINDEXSW= 2 week EURIBOR2WD= EONIAINDEX2W= 3 week EURIBOR3WD= EONIAINDEX3W= 1 month EURIBOR1MD= EONIAINDEX1M= 2 month EURIBOR2MD= EONIAINDEX2M= 3 month EURIBOR3MD= EONIAINDEX3M= 4 month EURIBOR4MD= EONIAINDEX4M= 5 month EURIBOR5MD= EONIAINDEX5M= 6 month EURIBOR6MD= EONIAINDEX6M= 7 month EURIBOR7MD= EONIAINDEX7M= 8 month EURIBORS8M= EONIAINDEX8M= 9 month EURIBOR9MD= EONIAINDEX9M= 10 month EURIBOR10MD= EONIAINDEX10M= 11 month EURIBOR11MD= EONIAINDEX11M= 1 year EURIBOR1YD= EONIAINDEX1Y=

Reporting by Frankfurt newsroom; Editing by John Stonestreet

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