Glossary

Interbank rate
The interbank rate is the interest rate charged by banks when conducting transactions of foreign currency with other banks. These rates are typically lower than interest rates paid by retail traders, but they are used to set those higher interest rates paid by individuals and institutions. Like all foreign currency exchange rates, these fluctuate constantly.
What is the interbank rate in the US?
In the US, the interbank rate is the exchange rate given to banks on short-term loans they borrow from other banks to ensure they can handle the day-to-day withdraws of their customers. This rate, also known as the target interest rate, is set by the Federal Open Markets Committee and closely monitored to help promote economic growth in the US.

Search the Academy

Look up the meaning of hundreds of trading terms in our comprehensive glossary.

A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
X
Y
Z