Bank Rate (redirected from Minimum lending rate)

Bank Rate

The rate at which central banks lend funds to national banks.

Notes:

A central bank adjusts the supply of currency within national borders by adjusting the bank rate. When the central bank reduces the bank rate, it increases the attractiveness for commercial banks to borrow, thus increasing the money supply. When the central bank increases the bank rate, it decreases the attractiveness for commercial banks to borrow, consequently decreasing the money supply.

See also: Central Bank, Economics, Macroeconomics, Monetary Policy, Money Supply, Open Market Operations, Reserve Requirement