PRIBOR is an abbreviation composed of the initial letters of the English words Prague InterBank Offered Rate. This abbreviation refers to the average interest rate at which banks in the Czech Republic lend money to each other on the interbank market. The Czech National Bank publishes the current PRIBOR rate on its website every working day after 1 pm. The rate is rounded to two decimal places.
Who calculates the PRIBOR rate?
The PRIBOR rate is calculated every business day by Reuters for the Financial Markets Association of the Czech Republic. It is the average of the indicated quotes of the reference banks. The Czech National Bank neither sets nor guarantees this rate, but announces the rules for its calculation.
Use of PRIBOR
Interest rates and yields on various financial products are derived from PRIBOR. Specifically, this can include bonds, financial derivatives, corporate or mortgage loans. In the case of mortgage loans, the development of the PRIBOR rate is important for people who have taken out an adjustable-rate mortgage. The interest rate on this mortgage is made up of the PRIBOR rate and the bank’s fixed mark-up.