FRANKFURT, April 18 (Reuters) - Euribor bank-to-bank lending
rates fell on Thursday after Bundesbank President Jens Weidmann
indicated the European Central Bank could cut official interest
rates already next month.
The ECB decided to leave interest rates on hold at its April
policy meeting, but ECB President Mario Draghi said the bank
would 'monitor very closely' all data and stand 'ready to act'
to boost the recession-hit euro zone.
On Wednesday, referring to interest rates, Weidmann told the
Wall Street Journal: 'We might adjust in response to new
information,' but added 'I don't think that the monetary policy
stance is the key issue'.
ECB policymakers have, however, indicated the bank is not
ready to cut the interest rate it pays to commercial banks on
their overnight deposits into negative territory from zero. The
deposit rate acts as a floor to money markets.
The ECB has also assured banks that it would continue to
supply them with unlimited liquidity for as long as needed.
On Thursday, the three-month Euribor rate,
traditionally the main gauge of unsecured bank-to-bank lending,
fell to 0.208 percent from 0.210 percent.
The six-month rate dipped to 0.322 percent from 0.325
percent, while the one-week rate ticked down to
0.082 percent from 0.083 percent. The overnight Eonia rate fell to 0.078 percent from 0.080 percent.
Dollar-priced bank-to-bank Euribor lending rates were stable, with three-month rates
remaining at 0.480 percent and one-week rates at 0.306 percent.
Excess liquidity in the euro zone banking
system fell to 349 billion euros, the lowest level since the ECB
flooded the markets with two 3-year loans more than a year ago,
but still high enough to keep market rates below the ECB's
Draghi said in February he does not expect market rates to
face upward pressure until excess liquidity in the banking
sector falls below 200 billion euros.
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
(Reporting by Frankfurt newsroom)
Keywords: MARKETS EURIBOR/
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