Nov. 28 (Bloomberg) -- The cost for European banks to borrow in dollars rose to the highest two weeks, according to a money-markets indicator.
The three-month cross-currency basis swap, the rate banks pay to convert euro interest payments into dollars, was 29.7 basis points below the euro interbank offered rate at 8:30 a.m. in London from minus 28 yesterday, according to data compiled by Bloomberg.
The one-year basis swap was little changed at 28 basis points below Euribor. A basis point is 0.01 percentage point.
A measure of European banks’ reluctance to make unsecured loans to one another rose. The difference between Euribor and overnight index swaps, known as the Euribor-OIS spread, was 12.4 basis points from 11.4 yesterday.
The European Banking Federation’s euro overnight index average, or Eonia, of unsecured lending deals was unchanged at 0.072 percent. The Eonia swap, an estimate of average overnight borrowing costs over the next three months, was 6.6 basis points.
Lenders decreased overnight deposits at the European Central Bank yesterday to 242 billion euros from 245 billion euros on Nov. 26.
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