The London Interbank Offered Rate, “LIBOR”, is the average interest rate estimated by leading banks in London which would be applied to them as a charge if borrowing from other banks.

The rates are calculated for ten currencies and 15 borrowing periods ranging from overnight to one year and are fixed on a daily basis by the British Bankers Association.

LIBOR is important as it is the world’s most widely used benchmark for short-term interest rates and countries rely on it for a reference rate.