Interbank lending market

 Credit sector expects swift deal for new funding program, otherwise country?s economy risks being derailed

By Yiannis Papadoyiannis

Greece is tapping into the cash reserves of pension funds and public sector entities through repo transactions as it scrambles to cover its funding needs this month, debt officials told Reuters on Tuesday.

The Turkish Lira recovered Dec. 17 after the Central Bank reassured the market that monetary tightening would continue until inflation improves.

The currency hit record lows on Dec. 16 due to an emerging market sell-off and domestic political tensions.

Eurozone overnight interbank interest rates fell to their lowest levels on record on Tuesday, while a sharp rally in government bonds started to ease for some countries.

Strategists said money markets were continuing to adjust to last week's cut in the European Central Bank's main interest rates and its promise of fresh liquidity for banks, which should help short-term rates stable.