July 23 (Bloomberg) -- The cost for European banks to borrow in dollars rose for the second day to the highest level in a week, 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 48 basis points below the euro interbank offered rate at 8:20 a.m. in London from minus 47 on July 20, data compiled by Bloomberg show. The cost fell to a seven-week low of minus 44.5 basis points on July 19.
The one-year basis swap was 53 basis points, or 0.53 percentage point, below Euribor. Three-month Euribor, the rate banks say they see each other lending in euros, was set at a record low 0.451 percent July 20.
The euro overnight indexed average, Eonia, was 11.5 basis points, while an estimate of overnight borrowing costs over the next three months, the Eonia OIS swap, dropped to a record-low 9.2 basis points from 9.4 on July 20. Eonia is derived from a daily survey of banks for the European Banking Federation.
Banks cut overnight deposits at the European Central Bank for the fourth day, placing 349 billion euros ($422 billion) with the Frankfurt-based ECB on July 20 from 357 billion euros the day before.
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