The cost for European banks to borrow in dollars fell for a third day to the lowest level in six 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 67.5 basis points below the euro interbank offered rate at 9 a.m. in London, from minus 70 yesterday, data compiled by Bloomberg show. The cost is the lowest since Aug. 5.
The one-year basis swap was 56 basis points less than Euribor, the cheapest level since Sept. 2. It was minus 56.5 yesterday. A basis point is 0.01 percentage point.
A measure of European banks’ reluctance to lend to one another was little changed. The Euribor-OIS spread, the difference between the borrowing benchmark and overnight indexed swaps, was 73 basis points in London, according to data compiled by Bloomberg.
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