LONDON (MarketWatch) -- Short-term borrowing costs continued to ease Monday, following last week's decision by the U.S. Federal Reserve to cut its key lending rate from 1.5% to 1%. The three-month London interbank offered rate, or Libor, for dollar loans fell to around 2.86% from around 3.03% on Friday. Economists look to easing Libor rates as a sign that tensions are easing in interbank lending markets. Before the credit crunch, three-month Libor typically traded within half a percentage point or less of the official Fed target. Three-month sterling Libor slipped to around 5.78% from 5.84% Friday, while three-month euro Libor edged down to just below 4.74% from around 4.77% Friday.
