Oct. 27 (Bloomberg) -- The cost for European banks to fund in dollars fell, according to money markets indicators.
The one-year basis swap, the rate banks pay to convert euro payments into dollars, was 66 basis points below the euro interbank offered rate at 8:44 a.m. in London, from 67.5 yesterday, according to data compiled by Bloomberg.
The three-month cross-currency basis swap was 96.5 basis points under Euribor from 97 yesterday. A basis point is 0.01 percentage point.
A measure of banks’ reluctance to lend to one another in Europe fell. The Euribor-OIS spread, the difference between the borrowing benchmark and overnight index swaps, was 78 basis points from 79 yesterday. That compares with 89 basis points on Sept. 23, when the measure was its widest since March 2009.
Overnight deposits at the European Central Bank rose. Banks parked 204 billion euros ($286 billion) at the Frankfurt-based ECB yesterday, up from 201 billion euros on Oct. 25. That compares with a year-to-date average of 64 billion euros.
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