LIBOR and Offshore: Difference between pages

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London InterBank Offered Rate, at which the quoting bank offers to lend to other first class banks.
1.
LIBOR is widely used as a reference rate.
'LIBOR' is sometimes written 'Libor'.


LIBID means the rate which the quoting bank will pay on funds deposited with it. So LIBOR is the higher rate, and LIBID is the lower rate, by the amount of the spread.
The siting of a currency asset in a location other than the country of which the currency is the domestic currency.


So for example:
For example, a holding of Japanese yen in the United States (which would also be known as 'Euroyen').
LIBOR = 5%
LIBID = 5% LESS 1/8% = 4 7/8% (= 4.8750%)


LIMEAN is the mid-rate around which the bid-offer prices are built.  LIMEAN is the average of LIBOR and LIBID. 


For example:
2. ''Verb.''


= [5% + 4 7/8%]/2 = 4 15/16% (= 4.9375%).
To offshore means to relocate a business - or part of a business - to another jurisdiction, often one where operational costs are lower.
 
Other motivations for offshoring can include geopolitical risk management, access to markets, physical resources, or skilled labour, and tax planning.
 
 
3. ''Tax.''
 
The term is also used in the context of transactions with a company resident in a tax haven, or about a company itself resident in a tax haven.


Short-term LIBOR rates (up to one year) are quoted on a simple interest basis.
Longer-term rates (over one year) are quoted as effective annual rates.


== See also ==
== See also ==
* [[Base rate]]
* [[Brexodus]]
* [[Cost-plus loan pricing]]
* [[CNH]]
* [[Effective annual rate]]
* [[CNY]]
* [[EURIBOR]]
* [[Euro]]
* [[euro LIBOR]]
* [[Euromarket]]
* [[Eurocredit]]
* [[Finance vehicle]]
* [[Floating rate note]]
* [[Geopolitical risk]]
* [[Forward rate agreement]]
* [[Offshore fund]]
* [[LIMEAN]]
* [[Onshore]]
* [[London inter-bank mean rate ]]
* [[Outsourcing]]
* [[London Interbank Bid Rate]]
* [[Reshore]]
* [[London InterBank Offered Rate]]
* [[Tax haven]]
* [[Simple interest]]
 
* [[TIBOR]]
[[Category:Accounting,_tax_and_regulation]]
* [[Total return swap]]
[[Category:The_business_context]]
[[Category:Financial_products_and_markets]]

Revision as of 21:16, 4 March 2023

1.

The siting of a currency asset in a location other than the country of which the currency is the domestic currency.

For example, a holding of Japanese yen in the United States (which would also be known as 'Euroyen').


2. Verb.

To offshore means to relocate a business - or part of a business - to another jurisdiction, often one where operational costs are lower.

Other motivations for offshoring can include geopolitical risk management, access to markets, physical resources, or skilled labour, and tax planning.


3. Tax.

The term is also used in the context of transactions with a company resident in a tax haven, or about a company itself resident in a tax haven.


See also

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