A currency deposited in a bank outside its country of issue, providing a cheap and convenient form of liquidity for international trade and investment.
Eurodollar bonds are bonds that pay interest and principal in Eurodollars, which are U.S. dollars held in banks outside the United States. These bonds are usually issued by foreign corporations or governments.
Eurodollars refer to U.S. dollars deposited in financial institutions outside the United States. The eurodollar market originated in London in the late 1950s, driven by the growing demand for dollars to finance international trade and investment.
The International Monetary Market (IMM) is a division of the Chicago Mercantile Exchange that specializes in trading futures contracts on various financial instruments including U.S. Treasury bills, foreign currency, certificates of deposit, and Eurodollar deposits.
The London Interbank Offered Rate (LIBOR) is the interest rate that the most creditworthy international banks dealing in Eurodollars charge each other for large loans. Serving as the equivalent of the federal funds rate, LIBOR is often used as a base rate for other large Eurodollar loans issued to less creditworthy corporate and government borrowers.
