Interbank Market

Interbank Market That part of the money market in which banks lend to one another, for very short periods, generally to maintain their SLR. The trading is done through a select number of brokers. In the London market the interest rate charged on such loans is called LIBRO (London Inter Bank Offered Rate).

The interbank market also deals in foreign currency transaction between banks, both on a spot basis and on forward options.

Similar rates are offered in other countries, e.g., Toronto (TIBRO), Hong Kong (HIBOR), Singapore (SIBOR), etc.

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