The cost for European banks to borrow in dollars held near the lowest level in more than five months, according to a money-market indicator.
The three-month cross-currency basis swap, the rate banks pay to convert euro interest payments into dollars, was at 76 basis points below the euro interbank offered rate at 8:22 a.m. in London, according to data compiled by Bloomberg. That’s the lowest since Aug. 8.
The one-year basis swap was unchanged from Jan. 20 at 68.5 basis points less than Euribor, the lowest since Dec. 7. 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 at 84 basis points from 85 on Jan. 20.
Overnight deposits increased at the European Central Bank, as lenders parked 492 billion euros ($636 billion) with the Frankfurt-based ECB on Jan. 20, compared with 421 billion euros the previous day.
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