Soaring U.S. Libor Trickles Into Funding Markets Worldwide
- Saudi Arabia, Hong Kong policy makers grapple with the impact
- Australian short-term funding costs are surging as well
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From Riyadh to Sydney, short-term funding markets worldwide are starting to feel the effects of soaring U.S. dollar Libor rates.
The surge in recent weeks in this key global short-term financing indicator may have a mostly technical explanation, meaning it’s probably not flashing warning signals like it was during the credit crunch or the European sovereign debt crisis. Nonetheless, it’s still making funding more costly for some borrowers outside the U.S.