May 30, 2012 / 9:28 AM / 6 years ago

ECB rate cut noise pushes Euribor to 2-yr lows

FRANKFURT, May 30 (Reuters) - Key euro zone bank-to-bank
lending rates fell to two-year lows on Wednesday, pushed down by
the weight of excess cash created by the ECB's twin long-term
funding operations and a growing belief the bank will have to
cut interest rates in coming months.	
    The ECB, which kept euro zone interest rates at 1.0 percent
again this month, has poured more than 1
trillion euros ($1.25 trillion) of ultra-cheap, three-year funds
into the banking system since the end of last year, halving
interbank lending rates.	
    Adding to the downward pressure, weaker-than-expected
economic data last week prompted a flurry of economists to
revise interest rate cut forecasts, with many now expecting at
least one 0.25 percentage point cut in the coming months,
possibly as early as next week. (click )	
    Having experienced a near-vertical six-month drop,
three-month Euribor rates, traditionally the main
gauge of unsecured interbank euro lending, continued their
slide, to 0.671 percent from 0.673 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 
    1 week       	
    2 week       	
    3 week       	
    1 month      	
    2 month      	
    3 month      	
    4 month      	
    5 month      	
    6 month      	
    7 month      	
    8 month      	
    9 month      	
    10 month    	
    11 month    	
    1 year       	
 (Reporting by Frankfurt newsroom; Editing by John Stonestreet)

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