The Dhaka Interbank Offered Rate (DIBOR) is an interest at which banks in Bangladesh offer to lend funds to one another in the interbank market. It serves as a reference rate for various financial transactions within the country.
DIBOR is calculated and
published daily by the Bangladesh Foreign Exchange Dealers Association (BAFEDA).
The rate is determined based on the submissions from a panel of participation
banks which provide their estimated borrowing costs in the interbank market. These submissions are then aggregated and DIBOR
is calculated as the average or weighted average of these rates.
DIBOR is typically available for various tenors, including overnight, one week, one month, three months and six months. Each tenor represents the length of time for which banks are willing to lend funds to one another in the interbank market.
Bangladesh Bank Governor Atiur Rahman formally launched Dhaka interbank offer rate DIBOR, which will help banks get a benchmark interest rate or reference rate. The governor said “An established benchmark rate is required for the buoyancy and transparency of any interbank market. Hopefully, this is a beginning towards the development of a liquid interbank term market in Bangladesh.”
As a widely recognized
benchmark rate, DIBOR is used in Bangladesh for pricing a range of financial
instruments, including loans, mortgages, and derivatives contracts. It provides
a standardized reference rate for determining interest rates and serves as a
basis for pricing various financial products in the country.