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Euribor steady ahead of 3-yr loan repayment operation
January 22, 2013 / 10:45 AM / 5 years ago

Euribor steady ahead of 3-yr loan repayment operation

FRANKFURT, Jan 22 (Reuters) - Euribor bank-to-bank lending
rates were unchanged on Tuesday, holding steady before a
European Central Bank operation on Friday that will allow banks
to repay 3-year loans.
    Banks took more than 1 trillion euros of ultra-cheap,
three-year loans, or Long-Term Refinancing Operations, from the
ECB in two separate offers roughly a year ago. The ECB used
these LTROs to try to restore order to Europe's crisis-hit
financial system.
    Banks can soon begin to repay the money early on a voluntary
basis. However, a key ECB policymaker has played down the impact
this would have on short-term rates. 
    Benoit Coeure, in charge of market operations on the ECB
board, on Friday played down the chance of banks repaying a
massive chunk of their LTRO cash this month and said excess
liquidity in the euro zone remained very high. 
    Reuters calculations show there is currently around 614
billion euros of excess liquidity sitting in euro
zone banks.
    While the heavy oversupply of ECB cash has long depressed
the rates banks charge each other on lending markets, the
prospect of a significant repayment, which analysts said could
be up to 300 billion euros, has driven rates higher recently.
    On Tuesday, three-month Euribor rates,
traditionally the main gauge of unsecured bank-to-bank lending,
remained unchanged at 0.209 percent. 
    The six-month rate was steady at 0.353 percent, and the
one-week rate stayed at 0.080 percent. The
overnight Eonia rate remained unchanged at 0.068
percent.
    Dollar-priced bank-to-bank Euribor lending rates
  were lower, with three-month rates
falling to 0.50364 percent from 0.50455 percent and one-week
rates dropping to 0.34364 percent from 0.34545 percent.
    
    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 Stephen Nisbet)

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