The rate on three-month loans in dollars dropped around 0.055 percentage points to 2.235 per cent, its lowest level since Nov 2004. Dollar rates have fallen for 21 straight working days.

Meanwhile, the rate for three-month loans in euros - known as the European Interbank Offered Rate, or Euribor - fell around 0.08 percentage points to 4.39 per cent, its lowest level since March 5.

And the rate in British pounds declined around 0.075 percentage points too to 4.42 per cent, its lowest level since April 2004.

Despite the ongoing falls in lending rates, the spreads between lending rates and central bank base rates remain well over 1 percent and nearly twice as large as they were in mid-Sept, when Lehman Brothers went bankrupt.

Benchmark rates in the US are 1.0 per cent, 3.25 per cent in the 15-nation currencies that share the euro and 3.00 per cent in Britain.

Before the credit crunch, widely thought to have begun in Aug 2007, the spread between bank lending rates and official base rates was only around 0.5 percentage points and in much calmer times was around 0.2 percentage points.

Interbank rates are important because they affect the cost of loans in the wider economy, for both businesses and individuals.

They skyrocketed in recent months as banks worried that other lenders might collapse. -- AP