![]() (For latest Libor rates with different maturities, please click here) From Banks point of viewĪsset Liability Management is the practice of managing risk that arise due to mismatches between the asset and liability (debt and assets) of the bank. From bank’s and importer’s point of view, which month Libor maturity is used is important to understand because of risk and cost factors. For simplicity of understanding the below article considering USD Libor rates only.įor Buyers Credit transaction with tenure more than 6 months but less than 5 years banks use Libor rates with various maturities between 6 Month to 12 Month Libor.įor example: For a buyers credit transaction with maturity of 360 days, buyers credit providing banks can offers quotes at 6 Month Libor with Reset every six months or 12 Month Libor. Libor is calculated for 7 different maturities and for 5 different currencies and with longest maturity rate of 12 Month. The below article elaborates on these factors. One such factor is buyers credit with 6 Month Libor Reset option. Refer link for more details on change in Libor: Change in LIBOR Tenures and Impact on Trade Financeīanks and Importers consider various factors before going for Buyers Credit transaction for more than 6 months tenure. This article might now be relevant for long tenure transactions (12 Months and Above). Note: Post this article there are changes in maturities for which libor is issued. ![]()
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