European banks’ reluctance to lend to one another held at the lowest level in more than nine months, according to a money-market indicator.
The Euribor-OIS spread, the difference between the euro interbank offered rate and overnight indexed swaps, was little changed at 38 basis points at 8:12 a.m. in London, data compiled by Bloomberg show. It’s the fifth day the measure has held at the lowest since Aug. 1.
The cost for banks to convert euro interest payments into dollars fell from the highest in more than two weeks. The three- month cross-currency basis swap was 45 basis points below Euribor from 48 yesterday, the highest since April 19.
The one-year basis swap fell from the highest since April 16. The measure was 55 basis points less than Euribor from minus 57 yesterday. A basis point is 0.01 percentage point.
Lenders cut overnight deposits at the Frankfurt-based European Central Bank yesterday, placing 696 billion euros ($902 billion) with the European Central Bank from 823 billion euros the day before.
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