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Interbank lending rates ease

Interbank lending rates ease

The cost of short-term dollar loans between banks eased Monday as central bank actions to loosen credit markets continued to have an effect.
The interest rate on three-month dollar loans _ known as the London Interbank Offered Rate, or Libor _ slid by less than a hundredth of a percentage point to 1.459 percent from 1.467 on Dec. 24, the last day the rate was fixed by the British Bankers' Association.
The rate for euro, or Euribor, slipped to 2.97 percent from 2.99 percent, while the three-month British pound Libor rate sank more sharply, to 2.815 percent from 2.872 percent.
The rates remain well above their central bank benchmarks, however, indicating the financial system is still under stress.
The U.S. Federal Reserve, Bank of England and the European Central banks have all cut interest rates and made additional credit available to banks in hope of easing the effects of the world financial crisis and getting lending going again. Heavy bank losses on subprime investments and sagging economies have made banks hoard cash.
Interbank rates are important for the wider economy since they affect the cost of loans for business and consumers.


Updated : 2021-03-09 13:24 GMT+08:00