Bank Rate (Noun)
Meaning
The discount rate fixed by a central bank.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The bank rate, set by the Federal Reserve, directly influences the interest rates offered by commercial banks to their customers.
- As the central bank's key tool for monetary policy, the bank rate plays a significant role in shaping the country's economy.
- During economic downturns, a low bank rate is often used to stimulate borrowing and spending among businesses and individuals.
- To curb inflation, the central bank increased the bank rate to make borrowing more expensive and slow down the money supply.
- Commercial banks often set their lending rates based on the bank rate set by the central bank, adding a margin to ensure a profit.