Three-month Euribor rates at new 3-1/2 month highs

Benchmark three-month Euribor bank-to-bank lending rates rose to their highest level in 3-1/2months on Thursday as markets awaited the European Central Bank's latest interest rate decision and its assesment of the Greek debt troubles.

The three-month rate EURIBOR3MD, traditionally the main gauge of interbank euro lending and a mix of interest rate expectations and banks' appetite for unsecured lending, rose to 0.677 percent from 0.672 percent, widening the gap from the record low of 0.634 percent reached late last month.

The six-month rate EURIBOR6MD inched up to 0.978 from 0.976 percent, the one-year rate EURIBOR1YD remained at 1.242 while shorter-term one-week rate EURIBORSWD rose to 0.358 percent from 0.357 percent.

Despite recent rises, bank-to-bank lending rates remain suppressed by the European Central Bank's recent promise to keep an unlimited supply one-week and one-month money flowing to money markets until at least mid-October.

The ECB has, however, begun to cut back on its support although fears that Greece's debt crisis may spread to other countries has sparked speculation it may have to relax the reins again.

Euribor rates are fixed daily by the Banking Federation ofthe European Union (FBE) shortly after 0900 GMT.

Three-month rates form a benchmark for much short-term commercial lending in Europe, and one-week rates give an indication of banks' very short term financing conditions.