European banks’ reluctance to lend to one another fell to the lowest in eight months, according to a money-market indicator.
The Euribor-OIS spread, the difference between the euro interbank offered rate and overnight indexed swaps, was 42 basis points at 1:32 p.m. in London, data compiled by Bloomberg show. That’s the lowest since Aug. 3.
The cost for banks to convert euro interest payments into dollars rose for the second day. The three-month cross-currency basis swap was 51 basis points below Euribor from minus 50 yesterday.
The one-year basis swap 44 basis points less than Euribor, from minus 43 yesterday. A basis point is 0.01 percentage point.
Lenders increased overnight deposits at the ECB yesterday to 777 billion euros ($1 trillion), up from 774 billion euros on March 27.
Three-month Euribor, the rate banks say they pay for three- month loans in euros, fell to 0.783 percent from 0.787 percent. One-week Euribor fell to 0.317 percent from 0.320 percent.
The London interbank offered rate, or Libor, for three- month dollar loans fell to 0.468 percent from 0.470 percent.
To contact the reporter on this story: Katie Linsell in London at firstname.lastname@example.org
To contact the editor responsible for this story: Paul Armstrong at email@example.com