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2026-07-17 17:28:12
[ECB Overnight Deposits Approach €2 Trillion, Market Liquidity Overabundance Remains Unchanged] ⑴ Liquidity data released by the European Central Bank (ECB) on Friday showed that financial institutions borrowed approximately €108 million through their overnight lending facility, up from €110 million the previous day, indicating continued weak marginal lending demand. ⑵ Over the same period, overnight deposit facility usage climbed to approximately €2.0248 trillion, continuing the increase from nearly €2.03748 trillion the previous day, reflecting ample excess liquidity within the banking system. ⑶ Current account holdings also expanded to approximately €332.4 billion, up from €326.6 billion the previous day, further confirming the current situation of idle funds accumulating on the ECB's balance sheet. ⑷ The persistently high usage of deposit facilities indicates that financial institutions prefer to deposit excess funds with the central bank rather than invest them in lending or arbitrage activities. Market expectations for short-term interest rate increases are cautious, and the process of absorbing excess liquidity in the Eurozone money market remains slow.
