Libor Rate Coming Down

According to Reuters, It’s likely due to the combination of lower rates, more liquidity and government schemes we will see the Libor rates coming down.

With Interbank lending and borrowing rates for sterling, euro and dollar falling lower in Tuesday, Central Banks in Europe along with the Bank of England worked hard to sustain the improvement by conducting operations to manage sterling and euro liquidity, with the Libor (interbank rates) likely to be fixed lower.

According to Traders the three-month sterling Libor is expected to be fixed at around 4.36 percent at The British Bankers Associations daily fixing between 1100 and 1200.

Market Experts say that the dollar and Sterling Libor falling for the past 21 sessions and the three-month euro Libor being fixed lower for 23 consecutive sessions is to a certain extent due to growing expectations of lower policy rates over the next few months.

The Banks and financial institutions use the Libor rate as an indication for them to set their own rates against when lending to each other.

Source: reuters