Euribor rates hold steady ahead of ECB rate meeting

FRANKFURT: Euribor bank-to-bank lending rates were unchanged on Tuesday, holding steady ahead of the European Central Bank's policy meeting on Thursday.

The ECB is widely expected to leave its main rate at a record low of 0.75 percent. A Reuters poll of 75 economists forecast last week the ECB would not change its rates until July 2014 at least - the end of the forecast horizon.

Euribor rates have climbed since the ECB announced on Jan. 25 that banks would repay early 137 billion euros in long-term loans - a move that has driven down excess liquidity in the financial system to around 484 billion euros.

In total, the ECB pumped more than 1 trillion euros into the banking system with two offerings of three-year loans, one in December 2011 and one in February 2012 as it tried to avert a credit crunch.

The heavy oversupply of ECB cash has long depressed the rates banks charge each other on lending markets, but a further significant repayment could drive rates higher.

On Tuesday, three-month Euribor rates, traditionally the main gauge of unsecured bank-to-bank lending, were unchanged at 0.233 percent.

The six-month rate held steady at 0.380 percent and the one-week rate stayed at 0.084 percent. The overnight Eonia rate dipped to 0.079 percent from 0.081 percent.

Dollar-priced bank-to-bank Euribor lending rates  were firmer, with three-month rates rising to 0.48364 percent from 0.47636 percent and one-week rates up at 0.32727 percent from 0.32182 percent.

Euribor rates are fixed daily by the Banking Federation of the European Union (FBE) shortly after 0900 GMT.