Key Euribor bank-to-bank lending rates firmed on Friday, finding fresh support after comments from a key European Central Bank policymaker dampened expectations that the bank will cut interest rates soon. ECB chief economist Peter Praet said earlier this week the main issue for the ECB at the moment was that its low interest rates were not filtering through to the real economy, but the situation was beginning to improve and there was currently no need for further ECB action.

Expectations that the bank was ready to cut rates in the coming months had driven the lending rates lower earlier this month, fuelled by comments from ECB President Mario Draghi, who had said there had been a "wide discussion" on rates at the policy meeting, at which the ECB kept rates at 0.75 percent.

On Friday, three-month Euribor rates, traditionally the main gauge of unsecured bank-to-bank lending, firmed to 0.184 percent from 0.183 percent. The six-month rate fell to 0.316 percent from 0.317 percent while the one-week rate edged up to 0.077 percent from 0.076 percent. The overnight Eonia rate rose to 0.071 percent from 0.066 percent. Dollar-priced bank-to-bank Euribor lending rates were mixed, with three-month rates down at 0.55923 percent from 0.56077 percent and one-week rates unchanged at 0.34077 percent.

Copyright Reuters, 2012