The European Central Bank said overnight deposits of financial institutions dropped to the lowest level in almost seven months.

Banks in the 17-nation euro region deposited €324.9 billion at the ECB last night, down from €808.5 billion the previous day, the least since December 21, the Frankfurt-based institution said.

Financial institutions are no longer remunerated for the funds they deposit at the ECB overnight after last week's interest-rate cuts took effect yesterday.

Policy makers on July 5 reduced the main refinancing rate to a record low of 0.75 per cent and cut the deposit rate to zero to stimulate credit supply and lending.

Bloomberg