Euribor

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    EuriborThe Euribor – the euro interbank offered rate – is the benchmark average short-term interest rate at which member banks in the European Union can lend to or borrow from each other.

    The European Banking Federation (EBF) – the industry body for EU banks – sets the rate daily using data from leading banks in the EU that make up the panel of contributors. The banks do not have to be based in the eurozone but the euro is the currency used.

    Calculating Euribor

    As with Libor, calculation of the daily rate is based on information submitted by a panel of 44 member banks on the theoretical interest rates being quoted between banks within the eurozone for term deposits with a maturity of one week to 12 months. The highest and lowest rates submitted are discarded, the rate being formed by the average of the remaining quotes to three decimal points. The news agency Reuters publishes the Euribor daily at 1100 CET.

    At least 50% of the panel member banks from a minimum of three countries must submit data for calculation of the rate.

    Note that Euribor is a spot rate calculated in real time. It should not be confused with the Euro Libor, which is a euro-based rate set by Libor in London as part of its index of rates.

    How Euribor affects the markets

    The Euribor determines the interest rate for trading various financial instruments such as euro-denominated forward rate agreements, short-term interest-rate futures and interest rate swaps. The euro is one of the world’s hardest and most liquid currencies, so the Euribor has further reach in affecting euro-dominated financial instruments traded outside the EU.

    As a reference rate, Euribor underpins euro-denominated interest rates set by retail banks for consumer products such as mortgage and credit cards, and their repayment costs.

    Further information

    Euribor website