How are swap rates determined?

Generally, swap rates are determined by market forces such as supply and demand, as well as expectations of future interest rate movements. Swap rates are influenced by factors such as prevailing interest rates, credit risk, liquidity conditions, and market participants' expectations. Swap rates are used in various financial applications.

What is a swap curve?

Each day, information on swap rates across various maturities quoted by banks are collected and plotted on a graph, known as the swap curve. Due to the time value of money and the expectations of changes in the reference rate, different maturities will have different swap rates.

What is overnight indexed swaps rates?

Overnight Indexed Swaps Rates: Monthly Average: 1 Month data remains active status in CEIC and is reported by Reserve Bank of Australia. The data is categorized under Global Database’s Australia – Table AU.M005: Interbank and Swap Rate. The Overnight Indexed Swaps Rates is for closing market rates of the banks involved.

What is a swap spread?

Swap spreads are used to understand the time value of money and how interest rates in the market change with time to maturity. When individuals and businesses borrow money from a lending institution, such as a bank, they have to make interest payments on the loaned amount. The interest rates applied to a loan can either be fixed or floating rates.