The usage of the European Central Bank's overnight deposit facility exceeds 2 trillion euros, with excess liquidity remaining unchanged.

⑴ Data released by the European Central Bank on Friday showed that the banking system borrowed approximately 290 million euros through the overnight lending facility, an increase from about 120 million euros the previous day, but still at an extremely low level, indicating limited marginal demand for financing. ⑵ Usage of the overnight deposit facility surged to about 2.01 trillion euros, up from roughly 1.97 trillion euros the day before, remaining near historic highs. This reflects that financial institutions continue to deposit large amounts of excess liquidity with the central bank to earn returns, rather than channeling it into the credit market. ⑶ The current account holdings stood at around 310.9 billion euros, showing a slight decline from the previous day. Overall, liquidity in the eurozone banking system remains exceptionally abundant, with money market rates continuing to track closely with the deposit facility rate. ⑷ The persistently high usage of the deposit facility confirms that the ECB's quantitative tightening process has not yet resulted in a substantial tightening of interbank liquidity, and market expectations for the central bank to continue balance sheet reduction remain unchanged. ⑸ The data also indicates that, although the ECB has paused interest rate hikes, the policy rate remains at a restrictive level. Banks, faced with high rates, choose to deposit excess funds with the central bank instead of allocating to risk assets, highlighting that credit expansion appetite remains weak.