stands for the London Interbank Offered Rate
and is the rate of interest
at which banks
borrow funds from other banks in the London wholesale (or "interbank") money market
The British Bankers Association (BBA) LIBOR rate is a widely used reference rate for forward rate agreements, and interest rate swaps.
It is based on inter-bank deposit rates offered by designated contributor banks. It is compiled by the BBA and released to the market at about 11:00 each day.
For a precise definition of BBA LIBOR, see the BBA website.