Libor falls below 0.6%

Written by Bloomberg | Updated: Jun 28 2009, 05:24am hrs
The cost of borrowing in dollars for three months in London dropped below 0.6% for the first time as central banks offered cash to financial institutions and signaled interest rates will stay at record lows.

The London interbank offered rate, or Libor, that banks charge for three-month loans fell half a basis point to 0.598% on Friday, according to the British Bankers Association, taking its decline this year to 83 basis points. The rate, a benchmark for about $360 trillion of financial products around the world, peaked at 4.82% on October 10 following the collapse of Lehman Brothers Holdings Inc on Sept 15. The Federal Reserve said June 24 it would keep its target rate for overnight loans, currently between zero to 0.25%, at exceptionally low levels for an extended period.