FRANKFURT (AFP) — The European Central Bank said on Friday it would keep lending dollars to eurozone banks for periods ranging from one week to about three months in the first quarter of 2009.

But is said it would halt so-called foreign exchange swaps owing to a lack of demand.
The ECB governing council decided to keep lending dollars for terms of seven, 28 and 84 days against collateral, but that “given the limited demand,” loans of dollars against euro cash would be discontinued at the end of January.
Such operations could be resumed in the future, “if needed in view of prevailing market circumstances,” a statement said.
The Bank of England, Bank of Japan and Swiss National Bank would also continue to loan dollars to their respective commercial banks, it added.
Under an agreement with the US Federal Reserve, the other central banks have made dollars available to banks that need them to underpin operations in the US currency.
In recent weeks, few banks had sought to borrow dollars using euro cash as collateral, and the move back toward previously prevailing market conditions was the second announced by the ECB in as many days.
On Thursday, the central bank said it would reset the margin of 1.0 percentage point between its benchmark lending rate, currently 2.50 percent, and the rate it pays to commercial banks that deposit money at the ECB.
The move effectively decreases the rate paid, possibly to 1.50 percent depending on the bank’s rate decision in mid January, and was seen as a way to encourage banks to resume more lending to each other, at more favorable rates.
Central banks seek to jumpstart movements on crucial interbank money markets that froze after the US market for high-risk, or subprime mortgages collapsed in mid 2007, and locked tighter after the US investment bank Lehman Brothers declared bankruptcy in mid September.
Interbank markets are a key link in the chain which provides credit to businesses and households.
--------------------Eurozone unexpectedly posts trade surplus: EU data
The 15 countries sharing the euro saw their trade balance with the rest the world swing unexpectedly into surplus in October, according to official EU figures on Thursday.
The eurozone chalked up a trade surplus of 900 million euros (1.3 billion dollars) in October, up from a revised deficit of 4.5 billion euros in September, the EU's Eurostat data agency said in a first estimate.
The figure, which was down from a surplus of 4.2 billion euros in October 2007, confounded economists expectations for a deficit of 5.0 billion euros, as polled by Dow Jones Newswires.
Exports grew 1.0 percent in October over one year while imports rose 3.0 percent, Eurostat said.
Meanwhile, the 27-nation European Union posted a trade deficit of 17.1 billion euros for October, compared with a shortfall of 23.5 billion euros in September and a deficit 15.3 billion euros in October 2007.