Compare the Difference Between Similar Terms

Difference Between

Home / Countries / India / Economy / Difference Between MIBID and MIBOR

Difference Between MIBID and MIBOR

April 16, 2011 Posted by Olivia

MIBID vs MIBOR

MIBOR stands for Mumbai Inter Bank Offered Rate, and serves the same purpose as LIBOR in London City. MIBID is the bid rate as against the offer rate. Indian government set up a committee for the development of debt market. This high powered committee suggested setting up inter bank rates on the lines of New York and London and thus came into existence MIBOR and MIBID for the overnight market. This was launched way back in 1998. Soon afterwards, NSE launched 14 day MIBID/MIBOR. After some time 30 day rates were launched and now we even have 3 month MIBID/MIBOR. MIBID and MIBOR are simple average of the quotes made by various participants in the market such as banks, PD’s, and other institutions polled on a daily basis.

MIBID/MIBOR rates are used for a vast majority of transactions in the field of interest rate swaps, forward rate agreements, term deposits and floating rate debentures. In India, the most widely used benchmark reference rate is MIBOR which is disseminated by national Stock exchange. Many banks, finance companies and financial institutions have issued MIBOR linked papers. MIBOR has been designed to give overnight clean reference rate and generally tracks the call market. It is the polling methodology that forms the basis of MIBOR. Rates are polled over phone from traders and they are asked as to what rate they would quote to borrow or lend Rs. 500 million in the overnight call money market.

You may be amused that thirty three banks and primary dealers are polled at 9:30 A.M every morning for overnight rates and then again at 1:30 for term rates. Average of all these rates is calculated with the lowest standard deviation and declared as the reference rate for the market.

In brief:

MIBOR is Mumbai Inter Bank Offered rate, while MIBID is Mumbai Inter Bank Bid Rate.

These rates are widely used as benchmark rates in the call market in India.

Related posts:

Difference Between India’s Stock Exchanges NSE and BSE Difference Between Infosys and TCS Difference Between BSE and NIFTY of India Difference Between Infosys and Wipro Difference Between Indian Banks HDFC and ICICI

Filed Under: Economy Tagged With: inter bank rates, LIBOR, MIBID, MIBOR, Mumbai Inter Bank Offered Rate, NSE

About the Author: Olivia

Olivia is a Graduate in Electronic Engineering with HR, Training & Development background and has over 15 years of field experience.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Request Article

Featured Posts

Difference Between Coronavirus and Cold Symptoms

Difference Between Coronavirus and Cold Symptoms

Difference Between Coronavirus and SARS

Difference Between Coronavirus and SARS

Difference Between Coronavirus and Influenza

Difference Between Coronavirus and Influenza

Difference Between Coronavirus and Covid 19

Difference Between Coronavirus and Covid 19

You May Like

Difference Between Proteasome and Protease

Difference Between Proteasome and Protease

What is the Difference Between Cipladine and Betadine

What is the Difference Between Cipladine and Betadine

Difference Between Cell Proliferation and Differentiation

Difference Between Cell Proliferation and Differentiation

Difference Between ABS and PBT

Difference Between ABS and PBT

Difference Between Physical and Virtual Memory

Latest Posts

  • What is the Difference Between Flat White and Cortado
  • What is the Difference Between Tack Coat and Prime Coat
  • What is the Difference Between Clogged Tear Duct and Pink Eye
  • What is the Difference Between Acute and Chronic Respiratory Acidosis
  • What is the Difference Between Rigidity and Spasticity
  • What is the Difference Between Pomeranian and Indian Spitz
  • Home
  • Vacancies
  • About
  • Request Article
  • Contact Us

Copyright © 2010-2018 Difference Between. All rights reserved. Terms of Use and Privacy Policy: Legal.