Euribor rates fall

Euribor bank-to-bank lending rates fell on Friday after the European Central Bank cut interest rates for the first time in 10 months on Thursday and held out the possibility of further policy action. Responding to a drop in euro zone inflation well below its target level and rising unemployment, the ECB lowered its main rate by a quarter percentage point to a record low 0.50 percent.
On Friday, the three-month Euribor rate, traditionally the main gauge of unsecured bank-to-bank lending, fell to 0.201 percent from 0.207 percent. The six-month rate fell to 0.302 percent from 0.313 percent while the one-week rate remained at 0.083 percent. The overnight Eonia rate fell to 0.078 percent from 0.102 percent. Dollar-priced bank-to-bank Euribor lending rates were mixed, with three-month rates unchanged at 0.47778 percent and one-week rates rising to 0.30222 percent from 0.30111 percent. Excess liquidity in the euro zone banking sector was at 313 billion euros, helping keep market rates below the ECB's refinancing rate.