BLBG:Bank Dollar Funding Costs Fall For Fifth Week To One-Year Low
The cost for European banks to borrow in dollars declined for the fifth week to the lowest in more than a year, according to a money-markets indicator.
The three-month cross-currency basis swap, the rate banks pay to convert euro interest payments into U.S. dollars, was 35 basis points below the euro interbank offered rate, or Euribor, at 8:20 a.m. in London, from minus 39.5 on Aug. 3. It is the lowest cost since July 26, 2011.
The one-year basis swap was unchanged at 40 basis points below Euribor, the lowest since Aug. 3, 2011. A basis point is 0.01 percentage point.
The three-month Eonia OIS swap was at 7 basis points, compared with 7.2 yesterday, according to data compiled by Bloomberg. The European Banking Federation’s euro overnight indexed average, or Eonia, of unsecured lending deals was set at 12.3 basis points yesterday, the highest since July 12, from 11.6 the day before.
Banks increased overnight deposits at the Frankfurt-based European Central Bank to 289 billion euros ($355 billion) yesterday, from 278 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
