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Euribor rates steady, pausing after year-long slide

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FRANKFURT, Oct 12 (Reuters) - Key Euribor bank-to-banklending rates steadied on Friday, as the prospect faded of theEuropean Central Bank loosening policy further with an interestrate cut.

The three-month Euribor rate

, traditionallythe main gauge of unsecured bank-to-bank lending, was unchangedat 0.210 percent. The six-month rate eased slightly to 0.415percent from 0.416 percent.

The rates steadied after ECB policymaker Christian Noyer onWednesday pushed back against calls for an ECB rate cut, sayingensuring the effective transmission of monetary policy right nowwas more important than the policy rate.

Shorter term one-week ratesremained at 0.081percent on Friday. Overnight Eonia ratesinched up to0.095 percent from 0.092 percent.

Bank-to-bank lending rates had been falling since Novemberlast year when news broke that the ECB was going to flood thebanking system with ultra-cheap, three-year cash.

The bank's decision in July to stop paying interest onovernight deposits has allowed the fall to continue by removingthe 0.25 percent floor for the money market.

Dollar-priced bank-to-bank Euribor lending rates

were mixed, with three-month ratesrising to 0.61385 percent from 0.61692 percent and overnightrates unchanged at 0.30846 percent.

The amount of excess cash in the euro zone banking systemremains extremely high at about 709 billion euros according toReuters calculations

.

With it set to remain high for the foreseeable future, moneymarket experts have focused on whether the ECB could copyDenmark's example and start charging banks to deposit cashovernight.

However, after initial interest in the idea, somepolicymakers have expressed reservations about it.

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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 ofthe European Union (FBE) shortly after 0900 GMT.

* For a table of the latest Euribor fixings for terms of oneweek to one year, double click on

* For a table of the previous day's fixings of EONIA swaprates, which show market expectations for future overnightlending rates, double click on

* For graphs of historic Euribor and EONIA swap rates, rightclick on the links in angle brackets below, and select 'RelatedGraph'1 week2 week3 week1 month2 month3 month4 month5 month6 month7 month8 month9 month10 month11 month1 year

(Reporting by Frankfurt newsroom)

((frankfurt.newsroom@reuters.com)(+49 69 7565 1209))

Keywords: MARKETS EURIBOR/