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Euribor rates hit record low before ECB rate decision

FRANKFURT, Oct 4 (Reuters) - Key Euribor bank-to-bank lending rates hit fresh record lows on Thursday, as the markets were expecting the European Central Bank to provide hints whether it planned to cut interest rates further.

The three-month Euribor rate

, traditionally the main gauge of unsecured bank-to-bank lending, fell to 0.216 percent from 0.218 percent.

Shorter term one-week rates ticked down to 0.081 percent from 0.082 percent after overnight Eonia rates

also hit a record low of 0.085 percent.

Bank-to-bank lending rates have been in virtual freefall since November last year when news broke that the ECB was going to flood the banking system with ultra-cheap, three-year cash.

The bank's decision in July to stop paying interest on overnight deposits has allowed the drop to continue by removing the 0.25 percent floor for the money market.

Dollar-priced bank-to-bank Euribor lending rates

also inched down, with three-month rates falling to 0.63077 percent from 0.63769 percent and overnight dollar rates edging down to 0.31000 percent from 0.31846 percent.

The amount of excess cash in the euro zone banking system remains extremely high at 713 billion euros according to Reuters calculations

.

With it set to remain high for the foreseeable future money market experts are instead focused on whether the ECB could copy Denmark's example and start charging banks to deposit cash overnight with it.

It is an idea that has been floated by a number of ECB policymakers but it would be a complicated move and add extra complexity to an already dysfunctional money market. (for story click

)

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For a package of graphics on the ECB, click on:

For graphic of euro zone liquidity levels click:

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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 Graph' 1 week 2 week 3 week 1 month 2 month 3 month 4 month 5 month 6 month 7 month 8 month 9 month 10 month 11 month 1 year

(Reporting by Marc Jones; Editing by Jeremy Gaunt)

((marc.jones@thomsonreuters.com)(+44)(0)(207 542 9033)(Reuters Messaging: marc.jones.thomsonreuters.com@reuters.net))

Keywords: MARKETS EURIBOR/