What is the monthly LIBOR Index?
LIBOR is an abbreviation for the “London Interbank Offered Rate”. Similarly to the Fed Funds Rate, it represents the rate at which banks are willing to loan each other reserves. The LIBOR is an average of the rate charged on dollar- denominated deposits traded between banks in London. LIBOR is quoted for specific terms as opposed to the Fed Funds Rate that is indicative of overnight loans between banks. A lot of short-term debt or “floating-rate” debt is priced off the LIBOR yield curve. It is an international standard for interest rates. LIBOR is expressed as 1-month, 3-month, 6-month and 1-year rates.
