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:
“Whoever thinks his friend more important than his country, I rate him nowhere.”
—Sophocles (497–406/5 B.C.)
“If the Union is once severed, the line of separation will grow wider and wider, and the controversies which are now debated and settled in the halls of legislation will then be tried in fields of battle and determined by the sword.”
—Andrew Jackson (1767–1845)
“The question confronting the Church today is not any longer whether the man in the street can grasp a religious message, but how to employ the communications media so as to let him have the full impact of the Gospel message.”
—Pope John Paul II (b. 1920)
“Everyone is always in favour of general economy and particular expenditure.”
—Anthony, Sir Eden (1897–1977)