Libor borrowing rate falls to 1997 level

The interest rate that banks charge to borrow from one another continued to tumble on Monday.

The London interbank offered rate, or Libor, that banks charge each to make overnight loans fell to 0.39% on Monday, from 0.41% on Friday — the lowest level since 1997 when the British Bankers’ Association began tracking the rate.

The three-month rate for dollars also dropped to 2.86%, from 3.03%.

This latest decline in Libor rates for U.S. dollars follows an Oct. 29 decision by the Federal Reserve to cut the federal funds rate to 1%, a half-point cut.

The Fed said that this cut, along with other coordinated interest rate cuts by other central banks, would help improve credit conditions.

News of the falling lending rates also comes after a week of tentative gains for the Standard and Poor’s 500 stock index, which closed at 968.75 on Friday afternoon and is now up by 10.46% since last Monday.

Mortgage Rates Near a Year High

Study Finds High Mortgage Fees

Euro central bank leaves rates unchanged

Fed to the rescue of AIG

Fed’s discount window sees record activity