Overnight Interbank Rate (IBR)
The Overnight Interbank Rate (IBR in Spanish) is a short-term reference interest rate for the Colombian peso that reflects the price at which the agents participating in its formation scheme (banking entities) are willing to offer or raise funds in the money market (interbank). In other words, its purpose is to show the liquidity of the Colombian money market or simply indicate the cost of money in Colombian pesos.
The IBR is calculated on the basis of quotes of the eight participants in this training scheme. The rates quoted correspond to the nominal interest at which these eight institutions are indifferent between lending and receiving funds for the respective term (overnight, one month, three months, six months, and twelve months).
In this scheme, the eight banks are selected annually using the “Camel” methodology, as they reflect the highest financial soundness in terms of capital adequacy (C), asset quality (A), management (M), earnings (E), and liquidity (L), in addition to other aspects.
With all this information, Banco de la República publishes daily (at 11:45 a.m.) the nominal quotes of each of the eight banks, the IBR with the nominal rate, the effective rate, and the real calendar days for each of the terms: overnight, and one, three, six, and twelve months.
