7 October 2003, 13:41  ECB allots rfis at 2.05% lowest rate

FRANKFURT, Oct 7 - The European Central Bank on Tuesday allocated 82 billion euros in 14-day refinancing agreements at 2.05 percent and above for a weighted average rate of 2.06 percent. The rates were in line with the results of a poll of money market dealers on Monday, which forecast a marginal rate -- the lowest at which the ECB allots funds -- of 2.05 percent and a weighted average rate of 2.06 percent. At last week's auction, the marginal rate and the weighted average rate were 2.05 percent and 2.06 percent respectively. Rates at the weekly tenders, the main source of central bank funds for euro area credit institutions, are an indication both of current liquidity conditions in the banking system and market expectations for official interest rates. Refinancing agreements for 81 billion euros expire on Wednesday, so a net 1 billion euros is flowing into the market. The ECB said it had accepted 52.44 percent of bids placed at the marginal rate. The ECB has set the floor for bidding rates at 2.00 percent in the weekly tenders. The lowest bid rate at the auction was 2.00 percent and the highest rate 2.10 percent. The ECB said 304 banks bid for 135.88 billion euros of the refinancing funds this week.//

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