What is the meaning of libor?
1 answersQuestion asked ( July 27, 2009 , Shopping / Finance )
I read in the news paper that banks in growing economies base their interest rates on libor. Can someone throw light on what libor is?
Answers to : What is the meaning of libor...
Answer
LIBOR means London InterBank Offered Rate. This is the daily reference interest rate at which the banks borrow unsecured funds from other banks for their short term money requirements from the inter bank market. This is an important feature of money markets in London by providing a basis for liquid and interest rate markets.
A consortium of the major trading banks set this rate at 11.00AM daily. Normally this rate is quoted for period of 1,2,3,6 and 12 months. Usually LIBOR is quoted in Eurodollars; sterling rate is referred to as Sterling LIBOR.
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