ICAI Program on –FOREX AND TRADE CREDIT

At Moradabad, 28th June, 2014

Presentation by:Ashit Hegde

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LIBOR and MIFOR

2Ashit Hegde

LIBOR is London Interbank offered Rate.

Libor is calculated and published by Thomson Reuters on behalf of British Banks Association . This is an index of the rate which a first class bank in London will charge another first class bank for a short term lending.

It is available for seven different maturities—from overnight to twelve months and in five different currencies including Euro, USD, Pound and Yen.

3Ashit Hegde

MIBOR is Mumbai Interbank Offer Rate

This reference rate originally developed by NSE is now co-branded with FIMMDA and is now known as “ FIMMDA – NSE MIBOR “.

Mibor is based on rates polled by NSE from a representative panel of 30 banks, institutions and mutual funds. The rate is used as a benchmark for majority of deals struck for swaps, FRAs etc

NSE releases this rate at 0955 hours for overnight rate and at 1215 hrs for other periods.

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MIFOR is Mumbai Inter bank Forex Offer Rate

This is a combination of USD Libor and forward premium.

Note: There is a proposal to shift the setting of Mibor from the existing polling method to volume weighted average of trades executed between 9am and 10am.

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NOSTRO A/C Banks in India maintain accounts with banks abroad in foreign currency. (E.g. UCO bank, Kolkata maintaining a/c with Citibank, New York in US Dollars)Such accounts are referred to as NOSTRO (Our a\c with you) a/c.

VOSTRO A/CThis is a rupee a/c maintained by a bank abroad with a bank in India in INR. (E.g. HSBC bank, Dubai maintaining a/c with Canara bank, Mumbai in INR)VOSTRO means your a/c with us.

6Ashit Hegde