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 and/or impact:
“All of us failed to match our dreams of perfection. So I rate us on the basis of our splendid failure to do the impossible.”
—William Faulkner (1897–1962)
“No master spirit, no determined road;
But equally a want of books and men!”
—William Wordsworth (1770–1850)
“Too many existing classrooms for young children have this overriding goal: To get the children ready for first grade. This goal is unworthy. It is hurtful. This goal has had the most distorting impact on five-year-olds. It causes kindergartens to be merely the handmaidens of first grade.... Kindergarten teachers cannot look at their own children and plan for their present needs as five-year-olds.”
—James L. Hymes, Jr. (20th century)