London Interbank Offered Rate

On 12th May, 2023, the Reserve Bank of India (RBI) issued an advisory to banks and other RBI- regulated entities asking them to take steps to ensure a complete transition away from the London Interbank Offered Rate (LIBOR) from July 1, 2023.

  • The central bank advised banks and financial institutions not to do new LIBOR-linked or the Mumbai Interbank Forward Outright Rate (MIFOR)-linked financial deals.

Rationale behind the Move

  • LIBOR is being phased out because of the role it played in worsening the 2008 Financial Crisis, as well as scandals involving LIBOR manipulation among rate-setting banks.
  • The global transition from Libor was ....
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