Money-market rates in London dropped as cash injections by central banks and the prospect of deeper reductions in borrowing costs worldwide showed signs of revitalizing confidence in lending.
The London interbank offered rate, or Libor, that banks charge each other for three-month loans in dollars fell 5 basis points today to 3.42 per cent, its 13th straight decline, according to the British Bankers' Association.
The comparable euro rate slipped 2 basis points to 4.83 per cent, the 15th consecutive reduction. Asian rates were lower.
Credit markets are thawing after the Federal Reserve began buying commercial paper from companies and policy makers worldwide provided cash-strapped banks with unlimited access to dollar funding. On Wednesday, the European Central Bank loaned banks 106.6 billion dollar for one week and 132 billion dollar for three months.