Since last weeks EUR442 billion 12-month money auction from the European Central Bank, the cost of three-month loans between banks has fallen to another record low. The European interbank offered rate or Euribor fell over 0.02% to 1.07%. The ECB has flooded European banks with cash at the benchmark rate of 1%, in the hope that this will kick-start interbank lending.

Analysts believe that the currency auction has done well to push short-term rates down but may not do much to perk up bank lending. The ECB has also been criticized for not doing all that they could do. For instance, the ECB has not acted as aggressively as the US Federal Reserve or the Bank of England in cutting interest rates or chasing unconventional methods.

Before the start of the auction, the three-month rate stood at 1.20%

The rates quoted above are interbank rates. Client rates may vary according to the volume and timing of the trade.