Libor

October 31st, 2008 7:53 am | by John Jansen |

Libor continues to plunge. Overnight Libor set this morning at 41 basis points versus 73 basis points yesterday.

Three month Libor declined to 3.03 from 3.19 yesterday.

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  1. 6 Responses to “Libor”

  2. By M on Oct 31, 2008 | Reply

    Overnight was crazy today, even though it is month end. Normally at month end rates are at least 10 to 15bp higher than the day before, and recently that could be much more. However, today o/n was offered at 20bp and lower in Asia. And Asia is usually quite a few bp higher than Europe and especially the US. Are they paying negative interest now in the US?

  3. By John Jansen on Oct 31, 2008 | Reply

    Just the central banks flooding the system with liquidity.

  4. By superduperdave on Oct 31, 2008 | Reply

    What’s all this talk about moving the Fed funds rate closer to zero? Yesterday it was at 0.18 percent — not the official rate, mind you, but the actual market rate. The Fed is saying one thing, while simultaneously it is actually instituting an effectice ZIRP, isn’t it?

  5. By John Jansen on Oct 31, 2008 | Reply

    I dont know if they are completely there but they certainly do not have a problem with levels well below the target rate.

  6. By joe on Oct 31, 2008 | Reply

    Paying interest on reserves was supposed to avoid the effective rate falling through the target rate – 35bps. Does not appear to be working…

  7. By fatbrick on Oct 31, 2008 | Reply

    It sounds like carry trades to me. Difference is that the carry traders are borrowing through CB channels instead of the interbank markets. How long can it last?

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