The lending rate likely to be affected is the Emirates Interbank Borrowing Rate pronounced Eeee-bor. The EIBOR's are an attempt to calculate at what general rate banks in the UAE lend Dirhams to each other. HSBC used to calculate them, but now that may have changed and the central bank may be in charge of figuring these out using the interbank bid and ask rates of several major local and foreign banks.
EIBOR's are given for different time periods, or "tenors" as banks like to call these periods. So when you call your banker or your bank's treasury department and ask them about the recent trend in EIBOR, they will have to ask you which one you are interested in. 1 week, One month, Two, Three, Six months or one year? The ordinary bankers would usually have access to the EIBOR's for the day, but the people in treasury will be able to give you historical rates.
If you have access to a Bloomberg or Thomson Reuters you will be able to pull up the EIBOR's. Bank treasury departments nd investment houses will have these terminals.
I've not followed EIBOR's during the DW standstill episode but it would make sense for interbank rates to have gone up.
Let's say you are FGB, and have invested in the Nakheel Sukuk. FGB's treasury would have been expecting money to come in from their Sukuk investment on the 14th or 15th of December, money paid in by one of Nakheel's banks. If FGB were caught unaware by the standstill announcement then they would be short of funds for mid December. So then FGB would increase the rate at which they would OFFER money to other banks. That is also the ASK rate. FGB would also increase their bid for interbank money.
The charts of EIBOR's, which capture the interbank lending or borrowing situation in the UAE, can be gotten off Bloomberg or Thomson Reuters.
Joined: 06 Dec 2011 Posts: 2 Location: united arab emirates
Posted on Tue 06 Dec 2011 10:28 by 13wiseman
You can check daily and historical EIBOR rates by visiting the UAE Central Bank website. On the home page they post the daily and 6 month rate.
Click on this link to view EIBOR rates and to access links to year over year EIBOR historical rates:
http://www.centralbank.ae/en/index.php?option=com_content&view=article&id=126%3Aeiborrates&catid=46%3Adataroom&Itemid=105 _________________ "People who succeed face their fears and take action despite them. People who succeed have an undying passion to accomplish and achieve their dreams and goals. People who succeed believe in themselves, are highly focused, are driven, and use fear as a motivator to find a way to achieve"
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