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The rate of interest charged on short-term loans made between banks.

Banks borrow and lend money in the interbank market in order to manage liquidity and meet the requirements placed on them. The interest rate charged depends on the availability of money in the market, on prevailing rates and on the specific terms of the contract, such as term length.

Most widely used interbank rates are LIBOR and EURIBOR. Other regionally found interbank rates are HIBOR and SIBOR.

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