RTRS:Euribor rates ease as ECB on strong euro watch
FRANKFURT, Feb 12 (Reuters) - Euribor bank-to-bank lending
rates eased on Tuesday, their recent gains eroded by hints from
the European Central Bank of concern over the economic impact of
a rise in the value of the euro.
ECB President Mario Draghi's comments on the currency last
week fed expectations its gains in recent months could open the
door to an interest rate cut.
After the bank kept rates on hold at 0.75 percent last
Thursday, Draghi also said that "there were hints and
discussions about how to improve financial conditions".
Euribor rates have climbed since the ECB announced on Jan.
25 that banks would repay a larger-than-expected amount in
long-term loans - a move that has driven down excess liquidity
in the financial system to just above 500 billion euros.
The heavy oversupply of ECB cash has long depressed the
rates banks charge each other on lending markets, and Draghi
said that excess liquidity of more than 200 billion euros should
limit upward pressure on market rates.
In total, the ECB pumped more than 1 trillion euros into the
banking system with two offerings of three-year loans roughly a
year ago as it tried to avert a credit crunch.
On Tuesday, three-month Euribor rates,
traditionally the main gauge of unsecured bank-to-bank lending,
dipped to 0.226 percent from 0.227 percent.
The six-month rate eased to 0.369 percent from 0.371 percent
and the one-week rate was unchanged at 0.082
percent. The overnight Eonia rate rose to 0.072 percent
from 0.068 percent.
Dollar-priced bank-to-bank Euribor lending rates
were mixed, with three-month rates
rising to 0.49182 percent 0.49091 percent and one-week rates
falling to 0.32545 percent from 0.32636 percent.