Euribor rates hit new lows

Key euro zone three-month bank-to-bank lending rates reversed Thursday's first post-ECB LTRO gain on Friday to hit new two-year lows, as the ECB's huge injections ultra-cheap, three-year funding continued to influence money markets. The ECB, which kept euro zone interest rates at 1.0 percent again this month, has poured more than 1 trillion euros of cheap long-term funds into the banking system since the end of last year, a move which has halved interbank rates in the process.
Three-month Euribor rates, traditionally the main gauge of unsecured interbank euro lending and a mix of interest rate expectations and banks' appetite for lending, rose for the first time since the ECB's injections on Thursday against a background of rising Greek euro exit fears. But the jump reversed on Friday as rates dipped to a new two-year low of 0.684 percent, down from 0.686 percent.
Six-month Euriobor rates also dropped, falling to 0.972 percent from 0.975 percent. Shorter-term one-week rates hovered near all time lows, easing to 0.317, while overnight rates fell to 0.320 percent from 0.330 percent. Dollar-priced bank-to-bank Euribor lending rates were mixed. Three-month rates fell to 0.937 percent from 0.944 percent while overnight rates rose to 0.315 percent from 0.313 percent.