International Euribor monthly rates.

ScouseMouse

Hiya all,

I think I am missing something here and hope someone can explain it to me.

On the international financial markets, the banks lend money to each other using the Euribor rates as seen below.

http://www.euribor-rates.eu/euribor-mortgage.asp

As shown in the example, the one month rate is around .41%, taken from the last three individual months. However, the "3 month average" is coming in at .682%

Want am I missing here or am I just plain stupid? .682 is not the average of .424% .419% and .417%

I ask as I am curious and I owe a million euro on this rate, so the difference will add up !!!!

Économiste Monétaire

That's the 3 month Euribor rate, not an average of previous 1 month rates.

soddy1979

Remember these are annualized rates also.

So a three month rate of 0.682% is actually a payment of 1/4 of this amount in three months.

For example, if your swap is pay quarterly and based on Euribor + 100 basis points, and it reset today, you will pay the following in three months.

1000000 * ((0.00682+.01)*.25) = EUR 4,205

ScouseMouse

My agreement is euribor 3 month + 1.55%. I am watching with interest....