Historical LIBOR Rate USD

A lot of Americans like to check the historical LIBOR rate USD before they look to buy a home or make another major investment. The LIBOR - which stands for the London Interbank Offered Rate - usually follows the Federal Funds Rate fairly closely.

The LIBOR Rate fluctuates often.

It is the average rate banks in London use to borrow from other banks and is updated once per day, although the actual rates individual banks can vary as often as by the hour. This rate can be used to determine rates on adjustable rate mortgages, securities, bonds and mutual funds.

Since it is closely tied with U.S. rates, some use it as a predictor of where the Prime Rate is going. The rate is published in pounds sterling, U.S. dollars and eight other currencies. To convert the rate to American money, some American banks are averaged into the rate. This is because using Eurodollars, which includes only European currency, would not accurately reflect the rate for American lenders.

Often a good way to predict economic trends is to look to the trends of the past. Because of this, economists have kept close track of the LIBOR since its advent in September 1989. These records include four different LIBORs:

• One month
• Three month
• Six month
• Twelve month

There are different rates depending on the length of time a bank lends out the money. A longer-term loan will often have a lower rate, although this is not always the case.

The initial LIBORs were as follows:

• One month, 9.063
• Three month, 9.125
• Six month, 9.063
• Twelve month, 9.0

The one month reached a high of 9.125 in November of 1990 and a low of 0.3834 in January of 2009. The three month rate was at its peak when the LIBOR began, but it didn’t reach its low of 1.1107 until March 2004. The six month rate also had its high in September of 1989, when it was at 9.063. Its low was in June of 2003 when it was at 1.1239. The 12 month rate peaked in September 1989 as well, and was lowest in June 2003 at 1.2014.

For more historical data for the LIBOR, visit the website for the Wall Street Journal.

As evident in a line graph of the historical LIBOR rate USD, the numbers for all of these rates went through basically the same peaks, valleys and plateaus over the course of the 1990s and 200s. They were high in the late ‘90s and early 2000s and then fell in 2002. They began a rise in early 2004, sat even in 2007 and then began an incredible tumble in late 2007, corresponding with the global economic crisis. Current events often have a big effect on the rate. This was especially true when millions of sub-prime mortgages went sour, since it put more than a few international banks in a lurch.

Economic analysts use the historical LIBOR to try to predict where the rate will be in the future. These people will sell their predictions to consumers or corporations to help them determine what their next economic moves should be. It is worth noting that predictions are rarely, if ever, 100% accurate, thus there are no guarantees that the markets will move in the way the analysts say they will. As with any financial gamble, there is some risk involved. However, looking at historic rates is better than just taking a stab in the dark.

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