April 19 (Bloomberg) -- European banks’ reluctance to lend to one another held at the lowest level in 8 1/2 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 40 basis points at 8:30 a.m. in London, data compiled by Bloomberg show. The measure has fallen from 95 at the start of the year to the lowest since Aug. 1.
The cost for banks to convert euro interest payments into dollars fell for the third day to the lowest in 8 1/2 months. The three-month cross-currency basis swap was 48 basis points below Euribor from minus 49 basis points yesterday. The cost is the lowest since Aug. 1.
The one-year basis swap was little changed at 55 basis points less than Euribor. A basis point is 0.01 percentage point.
Lenders’ cut overnight deposits at the European Central Bank yesterday, placing 757 billion euros ($994 billion) with the Frankfurt-based lender from 758 billion euros the day before.
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