Dollar LIBOR posts steepest one-day drop in a decade

NEW YORK: The interest rate that banks charge each other to borrow dollars for three months posted its biggest daily fall in 10 years on Friday as traders betted that the Federal Reserve may boost the number of US rate cuts to counter the potential economic impact of an escalating trade battle between China and the United States.

The three-month London interbank offered rate decreased by 4.75 basis points, marking its steepest single-day decline since a 5.5 basis-point drop on May 21, 2009.

This interbank borrowing gauge fell to 2.23925%, which was the lowest since March 2018.

LIBOR is the benchmark rate for $200 trillion worth of dollar-denominated financial products, mainly interest rate swaps and floating-rate loans.