The cost for European banks to convert euro interest payments into dollars fell from the highest in more than two months, according to a money-markets indicator. The three-month cross-currency basis swap, the rate banks pay to borrow in dollars, was 27 basis points below the euro interbank offered rate at 8:15 a.m. in London from minus 28 yesterday, data compiled by Bloomberg show. The measure was the most expensive since Sept. 5. The one-year basis swap was 30 basis points, or 0.30 percentage point, below Euribor from minus 29 yesterday. A measure of European banks’ reluctance to make unsecured loans to one another rose for a second day. The difference between Euribor and overnight index swaps, known as the Euribor- OIS spread, was 12.3 basis points from 12 yesterday. The European Banking Federation’s euro overnight index average, or Eonia, of unsecured lending deals was 0.08 percent yesterday from 0.082 percent the day before. The Eonia swap, an estimate of average overnight borrowing costs over the next three months, was the lowest since Sept. 3 at 7 basis points from 7.2 yesterday. Lenders cut overnight deposits at the European Central Bank to 239 billion euros ($304 billion) yesterday, the lowest since Dec. 19, from 252 billion euros the day before. To contact the reporter on this story: Katie Linsell in London at klinsell@bloomberg.net To contact the editor responsible for this story: Paul Armstrong at parmstrong10@bloomberg.net

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