Definition: The London Interbank Offered Rate (LIBOR) is the interest rate at which major banks distribute loans in the London interbank money market. The 3-month Swiss franc LIBOR is the average interest rate banks in London charge for 3-month loans in CHF.
Description: The 3-month LIBOR is used as a reference rate in Swiss monetary policy. The Swiss National Bank sets a target range for this rate extending over 1 percentage point and aims to keep the LIBOR within this range. LIBOR rates are fixed daily at 11:00 GMT. They are calculated as the average of the last ten quotes offered by sellers.
Influence: High interest rates lead to a decrease in lending and trigger an increase in consumer savings, causing a slowdown in economic growth. A rise in the Swiss LIBOR usually leads to an increase in capital flowing into Switzerland and provides a boost for the Swiss franc in the medium term. However, if the increase in rates is not accompanied by rapid economic growth, this may lead to economic stagnation and have a negative impact on the franc in the long run.
Market Impact: High
Released: Quarterly (March, June, September, December), usually on the third Thursday of the month
Source: The Swiss National Bank