Euribor rates rise after ECB keeps rates on hold

FRANKFURT (Reuters) - Euribor bank-to-bank lending rates rose on Friday, a day after the European Central Bank kept policy rates on hold and its President Mario Draghi damped expectations of a rate cut in the coming months.

The ECB kept its main refinancing rate on hold at a record-low level of 0.75 percent on Thursday and Draghi toned down fears of Italy's fractured election causing widespread economic uncertainty and delaying recovery.

Draghi also poured cold water on the possibility that the ECB could take the interest rate on its deposit facility into negative territory, saying that such a move could have "serious" unintended consequences.

Three-month Euribor rates, traditionally the main gauge of unsecured bank-to-bank lending, rose to 0.201 percent from 0.200 percent.

The six-month rate inched up to 0.324 percent from 0.321 percent, while the one-week rate remained at 0.079 percent. The overnight Eonia rate fell to 0.063 percent from 0.070 percent.

Dollar-priced bank-to-bank Euribor lending rates were lower, with three-month rates falling to 0.49500 percent from 0.49800 percent and one-week rates decreasing to 0.30100 percent from 0.30500 percent.

Excess liquidity in the euro zone banking system dipped to 382 billion, the lowest level since the ECB started its 3-year liquidity operations, but still high enough to keep market rates below the ECB's main refinancing rate, currently at 0.75 percent.

ECB President Mario Draghi said in February he does not expect market rates to face upward pressure until excess liquidity in the banking sector falls below 200 billion euros.

(Reporting by Frankfurt newsroom)