LIBOR

The London Interbank Offers Rate LIBOR is the world’s most widely used benchmark for short-term interest rates with maturities between overnight and one full year. The LIBOR is determined on a daily basis (as a nominal rate) It’s important because it is the rate at which the world’s most preferred borrowers are able to borrow money. It is also the rate upon which rates for less preferred borrowers are based. For example, a multinational corporation with a very good credit rating may be able to borrow money for one year at LIBOR plus four or five points.