Euribor rates hit new low on liquidity glut

FRANKFURT, Oct 10 (Reuters) - Key Euribor bank-to-bank lending rates hit fresh record lows on Wednesday, pushed down by large amounts of excess liquidity sloshing around in money markets.

The three-month Euribor rate

, traditionally the main gauge of unsecured bank-to-bank lending, fell to 0.211 percent from 0.212 percent. The six-month rate fell to 0.417 percent from 0.421 percent.

Shorter term one-week rates remained at 0.081 percent. Overnight Eonia rates dipped to 0.091 percent from 0.094 percent.

Bank-to-bank lending rates have been falling 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 fall to continue by removing the 0.25 percent floor for the money market.

Dollar-priced bank-to-bank Euribor lending rates

bucked the downtrend and rose, with three-month rates rising to 0.61077 percent from 0.60846 percent and overnight rates up to 0.30923 percent from 0.30615 percent.

The amount of excess cash in the euro zone banking system remains extremely high at 705 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.

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

ECB policymaker Christian Noyer on Wednesday pushed back against calls for an ECB interest rate cut, saying ensuring the effective transmission of monetary policy right now was more important for the euro zone than the policy rate.


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

For graphic of euro zone liquidity levels click:


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 Frankfurt newsroom; editing by Patrick Graham)

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