February 12, 2019 / 2:02 PM / 6 months ago

MONEY MARKETS-Dollar LIBOR records biggest rise in three weeks

Feb 12 (Reuters) - A key barometer of interbank borrowing costs rose on Tuesday, posting its biggest one-day increase in three weeks, but it remained close to its lowest since November on traders’ views the U.S. Federal Reserve would not raise interest rates in 2019.

The London interbank offered rate (LIBOR) to borrow dollars for three months increased to 2.69288 percent, up 0.49 basis point, its largest single-day rise since Jan. 22.

On Monday, it hit 2.68800 percent, which was the lowest level since Nov. 21.

Last week, it tumbled about 4.1 basis points, which was the biggest one-day drop since May 21, 2009.

LIBOR is the benchmark rate for $200 trillion worth of dollar-denominated financial products, mainly interest rate swaps and floating-rate loans.

In December, LIBOR reached its highest in more than decade, propelled by rate increases by the Fed, rising U.S. government borrowing and a shrinking Fed balance sheet.

On Jan. 30, the Fed said it would be “patient” before ratcheting key lending rates higher. Fed Chairman Jerome Powell said the case for rate increases had “weakened” in recent weeks.

The U.S. central bank also signaled it was prepared to adjust the normalization of its balance sheet.

Reporting by Richard Leong; Editing by Jeffrey Benkoe

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below