The interbank cost of borrowing

euros for three-months fell to a record low on Monday, pushed

lower by expectations that interest rates will stay low and the

markets remain flush with liquidity for some time.

The equivalent rate for dollars was steady compared with

Friday, while the sterling rate rose, though both stayed close

to record lows, according to the latest daily fixing from the

British Bankers' Association.

Key three-month Libor rates had come off record lows last

week as the fixing took in the year-end period for the first

time and after the European Central Bank allocated a

lower-than-expected 75 billion euros in its latest tender of

one-year funds.

The spread of three-month London interbank offered rates

over OIS rates for dollars narrowed 1 basis point to 14 bps,

while the euro spread narrowed by 2 basis points to 29 bps. The

sterling spread narrowed by 2 basis points to 17 bps.

The spread expresses the three-month premium paid over

anticipated central bank rates, or Overnight Index Swap rates

and is seen as a gauge of banks' willingness to lend to each

other -- a wider spread is seen as an indication of decreased

inclination to lend.

Below is a table of the London interbank offered rates

(Libor) for dollar, euro and sterling funds in percentage terms,

with the change from the previous session in parentheses.

EURO STERLING DOLLAR

O/N 0.27575 (-0.00500) 0.50250 (+0.00000) 0.20250 (+0.00250)

1WK 0.31750 (-0.00375) 0.50500 (+0.00250) 0.23625 (+0.00062)

2WK 0.33250 (-0.00375) 0.50375 (+0.00000) 0.24063 (+0.00000)

1MO 0.38750 (-0.00250) 0.50250 (+0.00125) 0.24438 (+0.00000)

2M0 0.54063 (-0.00812) 0.50938 (+0.00313) 0.25313 (+0.00063)

3MO 0.69375 (-0.00375) 0.54750 (+0.00625) 0.28406 (+0.00000)

6MO 0.99313 (-0.00375) 0.73375 (-0.00063) 0.60188 (-0.00125)

1YR 1.22313 (-0.00250) 1.09063 (-0.00312) 1.20688 (-0.00562)

3MTH LIBOR/OIS SPREAD (BPs)

29 (-2bps) 17 (-2 bps) 14 (-1bps)