August 21, 2012 / 9:28 AM / 5 years ago

Euribor rates hit new lows on ECB rate cut hopes

FRANKFURT, Aug 21 (Reuters) - Bank-to-bank lending rates
dropped to all-time lows on Tuesday on expectations the European
Central Bank will cut its interest rates as soon as next month
to help combat the euro zone crisis.
    The fall extended a downtrend in interbank rates that began
late last year when the ECB flooded money markets with cheap
longer-term cash.
    Three-month Euribor rates, traditionally the
main gauge of unsecured bank-to-bank lending, eased to 0.318
percent from 0.325 percent on Monday.
    Six-month Euribor rates also fell, to 0.591
percent from 0.600 percent. Shorter-term one-week rates
 were unchanged at 0.094 percent. Eonia overnight
rates fell to 0.109 percent from 0.112 percent.
    Dollar-priced three-month bank-to-bank Euribor lending rates
  fell to 0.754 percent from 0.768
percent, while overnight dollar rates dipped to 0.316 percent
from 0.317 percent.
    The ECB's move to stop paying interest on banks' deposits
has prompted them to make stronger use of the current account
facility, which still pays 0.75 percent interest for the
required reserves.
    A total of 333 billion euros was parked in the ECB's deposit
facility overnight. Banks' current account deposits at the ECB
fell to 537 billion euros.
    
    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 
    * 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 Ruth Pitchford)

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