Euro Interbank Offer Rate (Euribor)

The Euro Interbank Offered Rate (Euribor) is the average interest rate at which euro-denominated interbank term deposits are offered by banks in the eurozone to other banks. It is calculated daily by the European Banking Federation based on a survey of 16 major banks.

Euribor is used as a benchmark interest rate for a variety of financial products, including loans, mortgages, and bonds. It is also used as a reference rate for derivatives such as interest rate swaps and forward rate agreements.

The Euribor rate is influenced by a number of factors, including the level of demand for euro-denominated funds, the supply of euro-denominated funds, and the risk premium that banks charge for lending to each other.

The Euribor rate is typically higher than the European Central Bank's (ECB) main refinancing rate, which is the rate at which the ECB lends to banks. This is because banks typically charge a higher interest rate to each other than they do to the ECB.

The Euribor rate can be volatile, and it can fluctuate significantly over time. This can make it difficult for businesses and individuals to plan for their financial future.

Despite its volatility, the Euribor rate is an important benchmark interest rate for the eurozone. It is used by a wide range of financial institutions and investors, and it plays a significant role in the eurozone economy.