definitions London Interbank Offer Rate (LIBOR)

London Interbank Offer Rate (LIBOR)

The offer rate that a Euromarket bank demands in order to place a deposit at (or, equivalently, make a loan to) another. The deposit rate on interbank transactions in the Eurocurrency market. The interest rate that world-class banks in London pay each other for Eurodollars. The interest rate that the largest international banks charge each other for loans, usually of Eurodollars. In fact, LIBOR includes rates quoted each day for many currencies, excluding the euro, but it is the rate for dollar loans that is used as a benchmark for other transactions.