|Euribor rates hit new lows on rate cut hopes
Bank-to-bank lending rates dropped to all-time lows on Tuesday on expectations the European Central Bank will cut its interest rates as soon as next month to help combat the euro zone crisis, Reuters reports.
The fall extended a downtrend in interbank rates that began late last year when the ECB flooded money markets with cheap longer-term cash.
Three-month Euribor rates, traditionally the main gauge of unsecured bank-to-bank lending, eased to 0.318 percent from 0.325 percent on Monday.
Six-month Euribor rates also fell, to 0.591 percent from 0.600 percent. Shorter-term one-week rates
were unchanged at 0.094 percent. Eonia overnight rates fell to 0.109 percent from 0.112 percent.
Dollar-priced three-month bank-to-bank Euribor lending rates
fell to 0.754 percent from 0.768 percent, while overnight dollar rates dipped to 0.316 percent from 0.317 percent.
The ECB's move to stop paying interest on banks' deposits has prompted them to make stronger use of the current account facility, which still pays 0.75 percent interest for the required reserves.