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Overnight reserves growing

COMMERCIAL banks' overnight deposits at the European Central Bank inched further above the 100 billion euros mark, as commercial banks continued to hoard cash at the central bank.

The ECB said banks deposited 108.378 billion euros (US$129.5 billion) overnight at the central bank on March 5, up from the 102.987 billion euros reported on Thursday.

Banks also borrowed 809 million euros from the ECB's emergency overnight borrowing facility, compared with 83 million euros taken previously.

The rates on the ECB's overnight facilities will fall by 50 basis points on Wednesday, in line with the decision two days ago to cut interest rates to a record low.

This will take the overnight lending rate to 2.5 percent, from 3.0 percent now, and the deposit rate to 0.5 percent, from 1.0 percent.


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