London Inter Bank Rate falls again

Grovelawn Financial News 21/10/2008

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Good news from the banking system

Libor, the London Inter Bank Offered Rate, went down yesterday by 0.04% and has continued to fall again today. Libor is the rate that influences lenders most and affects all borrowers looking for a mortgage. The interbank cost of borrowing dollars also fell today in a welcome glint of good news in the beleaguered money markets. The three month Libor for borrowing dollars has fallen 0.225 per cent today to 3.83375 per cent.

Although the Libor rate is above Bank of England base rate it is good news for borrowers. The cost of borrowing euros has also dropped. The Dow Jones closed up by 4.67 per cent and the FTSE 100 gained 5.4 per cent yesterday.

The Bank of England has released dollars into the money markets to try to restore a measure of confidence in the market by making $10billion available in its daily operations, the bank released over $25billion today in its 28 day unlimited tender and will make more available in its weekly operation.

← Economists argue for extreme cut in base rate | News For October 2008 | Help for those facing home repossessions →

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