Key Euribor interest rate rose slightly on Tuesday but remained close to record lows as the glut of cash pushed into markets by the European Central Bank kept downward pressure on bank-to-bank lending rates. The three-month rate - traditionally the main gauge of interbank euro lending, a mix of interest rate expectations and banks' appetite for unsecured lending - rose to 0.663 percent from 0.661 percent on Monday.
The six-month rate also rose, to 0.964 percent from 0.963 percent, while the one-year Euribor rate remained at 1.224 percent and the shorter-term one-week rate was flat at 0.343 percent. The ECB in December announced plans to start unwinding the generous liquidity it has used to fight the financial crisis, bringing market rates to historic lows. However, it has promised to continue providing banks with unlimited funds until at least the end of the first quarter, keeping downward pressure on money markets for the time being.
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