Key Euribor rates unchanged

Key euro-priced bank-to-bank lending rates held steady and below the European Central Bank's 1.0 percent main rate on Friday, pushed down by the high level of excess liquidity in the money market. The three-month Euribor rate - traditionally the main gauge of unsecured interbank euro lending and a mix of interest rate expectations and banks' appetite for lending - remained at 0.997 percent, unchanged from the previous day, when it reached the lowest level since mid-October.
Shorter-term one-week rates decreased to 0.552 percent from 0.560 percent. Overnight rates fixed at 0.379 percent on Thursday. Six-month rates remained at 1.223 percent while longer-term 12-month rates fell to 1.505 percent from 1.506 percent.
The three-month Euribor rate broke above the European Central Bank's 1.0 percent benchmark rate for the first time in well over a year in October in what was expected to be a milestone in money markets' return to normality. However, rates have been dropping back again in recent weeks as the ongoing debt problems in the euro zone forced the ECB to extend its limit-free lending to banks out to mid-April. They fell back below 1.0 percent on Tuesday.
While banks will still have the security of unlimited ECB funding for the early part of the year, the central bank will almost be back to its pre-crisis range of funding offerings by January. There is currently about 50 billion euros of excess liquidity in euro zone money markets, according to Reuters calculations. Three-month loans will again be the longest maturity on offer and banks have now paid back all the six-month and 12-month loans the ECB injected during the financial crisis. The central bank is expected to keep interest rates on hold at a record low of 1 percent this month.