Oct. 22 (Bloomberg) -- The London interbank offered rate, or Libor, that banks charge each other for overnight loans in dollars fell 16 basis points to 1.12 percent, the lowest level since June 2004, the British Bankers' Association said.

The rate for three-month loans dropped 29 basis points, or 0.29 percentage point, to 3.54 percent.

The Libor-OIS spread, a gauge of cash availability that measures the difference between the three-month rate and the overnight indexed swap rate, narrowed to 250 basis points for the first time since Sept. 30.

To contact the reporter on this story: Gavin Finch in London at gfinch@bloomberg.net

Last Updated: October 22, 2008 07:01 EDT