What are Interbank Rates?
Definition of Interbank Rates: These rates in the world of Forex trading are described as the overseas rates at which the international banks purchase and sell money. This market is regarded as the fiscal system and also as the trading of money among the financial institutions and banks, leaving the retail investors and trading parties. Most of the Interbank trading emerges from the account of banks, although there are some banks that perform Interbank trade for the large customers. Different from the Market, the trading market do not have a central exchange. The Electronic Broker Service also known as EBS and the deals with nearly 3000 matching are two competitors involved in the brokering platform and links nearly 1000 banks. The market for the currencies holds the marketable turnover of the money investments and the huge amount of superlative, short term trading. As per the data collected by the International Settlement Bank, nearly 50% of the Forex transactions are resolved by utilizing the quotes of Interbank. The rates of Interbank can also be applied to the interest rate that the popular banks charge for exchanging the liquid money among each other. A general rate setting method for the Euro-Dollars is known as LIBOR.