Interbank Rate

Interbank Rate is the interest rate charged on short-term loans between banks.

Banks frequently engage in lending, borrowing, and reserve adjustments. Examples include overnight lending in the federal funds market, European interbank offered rates (Euribor), and London Interbank Offered Rate (LIBOR). These rates reflect the liquidity conditions and credit risk perceptions in the banking sector.

Banks utilize these rates to manage daily operations, meet regulatory requirements, and ensure financial stability.