Australian Financial Markets Association (AFMA) Bank-Bill Reference Rate (BBSW)

AAA

DEFINITION of 'Australian Financial Markets Association (AFMA) Bank-Bill Reference Rate (BBSW)'

The bank bill interest rate is the wholesale interbank rate within Australia and is published by the Australian Financial Markets Association (AFMA). It is the borrowing rate among the country's top market makers, and is widely used as the benchmark interest rate for financial instruments.

INVESTOPEDIA EXPLAINS 'Australian Financial Markets Association (AFMA) Bank-Bill Reference Rate (BBSW)'

The bank bill interest rate is Australia's equivalent of LIBOR or SIBOR and is used as a reference rate in much the same way. For instance, a variable floating rate may quote 100 basis points over LIBOR, whereas in Australia they may use 100 basis points over the BBSW. Although frequently abbreviated to "bank bill rate", the actual term is the "bank bill swap interest rate", hence the abbreviation BBSW.

RELATED TERMS
  1. LIBOR

    LIBOR or ICE LIBOR (previously BBA LIBOR) is a benchmark rate ...
  2. Foreign Investment Funds (FIF) ...

    A tariff imposed on Australian residents by their government ...
  3. Bank Reserve

    Bank reserves are the currency deposits which are not lent out ...
  4. Tax Accounting

    Accounting methods that focus on taxes rather than the appearance ...
  5. Australian Stock Exchange - ASX

    The stock exchange headquartered in Sydney, Australia. The Australian ...
  6. Singapore Interbank Offered Rate ...

    The interest rate at which banks located in Asian time zones ...
Related Articles
  1. How Risk Free Is The Risk-Free Rate ...
    Options & Futures

    How Risk Free Is The Risk-Free Rate ...

  2. Forces Behind Interest Rates
    Economics

    Forces Behind Interest Rates

  3. Top 8 Most Tradable Currencies
    Forex Education

    Top 8 Most Tradable Currencies

  4. Why Interest Rates Matter For Forex ...
    Forex Education

    Why Interest Rates Matter For Forex ...

Hot Definitions
  1. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  2. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  3. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  5. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  6. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
Trading Center