Better liquidity in Europe, EURIBOR at new low, 2.25 per cent
Saturday, January 24, 2009 @ 11:42 AM
The three months European Inter banking Offered Rate was fixed today at 2.25 per cent, down from yesterday's 2.31 and the lowest rate since October 28, 2005. The news, which means further relief for variable rate mortgage holders, since the three months rate is used as a benchmark by most banks in their variable rate, is a further consequence of the latest cut of interest rates by the European Central Bank. But at the same time it means that conditions are normal again from the point of view of the credit crunch experienced last autumn. Nowadays, as a matter of fact, the spread between base interest rate and the three months EURIBOR is just 0.25 per cent, while last October, at the highest point of the credit crunch, the spread over the base rate was 1.13 per cent.