Web Trader MT5
A benchmark interest, daily published by the European Money Markets Institute, for five maturities of the interbank money market: one week, one month, three months, six months and a year. Rates are based on those submitted by a panel of contributing banks.
EURIBOR is used in a great deal of financial contracts, including floating rate mortgages, corporate loans, interest rate swaps and structured products in Europe. The 25 basis point change has an impact on millions of contracts at the same time, making EURIBOR one of the most economically significant benchmark rates in the world.
This rate has been reformed since the scandals surrounding the manipulation of LIBOR and other rates, as well as more rigorous controls and transaction-based methodologies to lessen the impact of the panel-bank gaming that had compromised previous versions.
Example: If a eurozone mortgage taker has a floating-rate set with a reference index of EURIBOR three-month forward, their monthly mortgage repayments increase following ECB rate hikes and rising interbank financing costs. With the EURIBOR linkage, the central bank policy directly or indirectly has a direct and instant effect on household cash flows, since it is simply the arithmetic of a variable rate which is recalculated at the next reset date, no renegotiation, no lag, nothing.
