The United Arab Emirates central bank will launch its new mechanism for fixing the interbank offered rate on October  1, bankers said on Sunday, as it moves to lower rates it says are too high and do not reflect the market.

"There was communication from the central bank that the official EIBOR (Emirates Interbank Offered Rate) will be launched on October 1, but there would be a meeting prior to that to finalise some operational issues," a senior treasury official at an Abu Dhabi-based bank said.

Some details on how the interbank offered rate will be calculated from the data provided by banks still need to be settled, he said, with the final formula expected to be announced before Thursday.

Last month, the central bank rejigged the panel of providers for EIBOR in the hope it would lower interbank rates.

The new 11-bank panel -- which includes four new local banks and dropped two foreign lenders -- was expected to begin work in mid-September.

A Dubai-based banker confirmed the October 1 start date and said the central bank was keen to lower interbank lending rates as many banks base their loans to customers on EIBOR.

"A lower rate will help borrowers and should ease some of the liquidity pressures in the country, helping to revive the economy," he said.

"The central bank is doing this because they feel that under the old system rates were too high and that by managing the process themselves and changing the make-up of the panel this will lead to lower EIBOR rates," he said. - Reuters