Definition of EURIBOR: Understanding the European Interbank Interest Rate

Euribor is the abbreviation for EURO Interbank Offered Rate, which is the interbank interest rate offered by European banks. It is tested and published daily in Europe by the Europäische Zentralbank (ECB). It is usually expressed on a monthly or quarterly basis, and serves as the base rate for calculating interest rates and short-term bank loans.

Euribor is generally used to determine the value of variable-rate contracts, including mortgages and interest-rate swaps. It is also used by banks to determine their short-term interest rates for deposits, lending and trading with each other.

Euribor is an indicator of the health of the banking sector and is a key indicator of interest rates and monetary conditions across Europe. The level of Euribor rates is a good indicator of the economic and financial health of Eurozone member countries, as most short-term loans in the Eurozone are indexed to Euribor.