How The Rate Is Determined and Its Impact On The Economy
The interest rate that is charged by a country’s central or federal bank on loans and advances to control money supply in the economy and the banking sector. This is typically done on a quarterly basis to control inflation and stabilize the country’s exchange rates. A fluctuation in bank rates triggers a ripple-effect as it impacts every sphere of a country’s economy. For instance, the prices in stock markets tend to react to interest rate changes. A change in bank rates affects customers as it influences prime interest rates for personal loans. It is the rate at which central bank provides to the commercial bank for the excess reserves being kept with the central bank.
Read more about this topic: Bank Rate
Famous quotes containing the words rate, determined, impact and/or economy:
“Unless a group of workers know their work is under surveillance, that they are being rated as fairly as human beings, with the fallibility that goes with human judgment, can rate them, and that at least an attempt is made to measure their worth to an organization in relative terms, they are likely to sink back on length of service as the sole reason for retention and promotion.”
—Mary Barnett Gilson (1877–?)
“I find myself both as man and as myself something more determined and distinctive, at pitch, more distinctive and higher pitched than anything else I see.”
—Gerard Manley Hopkins (1844–1889)
“Conquest is the missionary of valour, and the hard impact of military virtues beats meanness out of the world.”
—Walter Bagehot (1826–1877)
“I favor the policy of economy, not because I wish to save money, but because I wish to save people. The men and women of this country who toil are the ones who bear the cost of the Government. Every dollar that we carelessly waste means that their life will be so much the more meager. Every dollar that we prudently save means that their life will be so much the more abundant. Economy is idealism in its most practical terms.”
—Calvin Coolidge (1872–1933)