libor rate in FM for CA Final

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Sanjay.F. sharma

Sanjay.F. sharma (Querist)
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26 August 2010 What is the concepts and how it work please tell me with an example.. pLease Please..

sudhakar ca cwa

sudhakar ca cwa (Expert)
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26 August 2010 LIBOR means london bank order rate
it is similar to the PLR rate in India.

it is yardstcik for international interest rates.

for changes in interest they will specify Libor rate + base points

100 base points = 1%

Libor rate is different for fixed and flotation interests.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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26 August 2010 LIBOR is the interest rate that banks charge each other for one-month, three-month, six-month and one-year loans. LIBOR is an acronym for London InterBank Offered Rate. This rate is that which is charged by London banks, and is then published and used as the benchmark for bank rates all over the world.
LIBOR is compiled by the British Bankers Association (BBA), and is published 11 am each day in conjunction with Reuters. It is comprised from a panel of banks representing countries in each currency.
LIBOR is also used to guide banks in setting rates for adjustable-rate loans, including interest-only mortgages and credit card debt. Lenders typically add a point or two to create a profit

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