It is the interest rate required by large international banks when they are willing to borrow from other large international banks. This is the interest rate involved when commercial banks trade dollars deposited in non-American banks in the London interbank market.

LIBOR is usually used as a benchmark for commercial loans, mortgages and debt issuance. At the same time, the interest rate of floating rate long-term loans will also be determined on the basis of LIBOR, which is also the reference interest rate of many contracts.

Extended data

A certain interest rate is often used as the benchmark interest rate in the financial market, and there are not only Libor (London Interbank Offered Rate), Hibor (Hong Kong Interbank Offered Rate) and Shibor (Shanghai Interbank Offered Rate) with reference value.

As the price of capital, interest rate is determined and influenced by many complicated factors, and the interest rate level is ultimately determined by the comprehensive influence of various factors. First of all, the interest rate is influenced by the average profit level of the industry, money supply and demand and economic development. Secondly, it is influenced by price level, interest rate control, international economic situation and monetary policy.

The adjustment of interest rate floating range is an important link in the reform of interest rate marketization. For many years, we have been implementing the policy that the deposit interest rate will not go up or down temporarily, and the loan interest rate can go down from 10% to 70% on the basis of the benchmark interest rate. However, since June 8, 20 12, the People's Bank of China has allowed commercial banks to raise the deposit interest rate to 10% of the benchmark interest rate, and the pace of interest rate marketization has gradually begun.

Baidu encyclopedia -LIBOR interest rate

Baidu Encyclopedia-London Interbank Offered Rate