base rate


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Base rate

British equivalent of the US prime rate.

Discount Rate

The interest rate at which the Federal Reserve makes short-term loans to member banks. The discount rate is an indicator of the direction in which the Federal Reserve is trying to push the broader economy. In general, a low interest rate indicates that it is trying to promote growth by making liquidity easily available, and a high interest rate shows that the Fed is concerned about inflationary pressures on the economy and trying to reduce the amount of money in the economy. Along with the sale of Treasury securities and the determining of the fed funds rate, setting the discount rate is one of the primary ways the Federal Reserve sets the monetary policy of the United States.

base rate

see INTEREST RATE.

base rate

the INTEREST RATE that is used by the COMMERCIAL BANKS to calculate rates of interest to be charged on bank loans and overdrafts to their customers. For example, a large company might be charged, say, an interest rate of base rate plus 2% on a loan, whereas a smaller borrower might be charged, say, base rate plus 4%. Formerly, base rates were linked directly to BANK RATE but are now fixed by reference to the ‘official’ rate of interest set by the MONETARY POLICY COMMITTEE of the Bank of England. See PRIME RATE.
References in periodicals archive ?
RBI introduced the Marginal Cost of Funds based Lending Rates (MCLR) system with effect from April 1, 2016 on account of the limitations of the Base Rate regime.
This is quick off the mark as financial firms usually put mortgage rates up immediately but are slow at increasing the interest for savers when the base rate goes up.
In a statement, the central bank said, 'The National Bank of Kazakhstan has decided to reduce the base rate to 12 percent with a corridor of 1 percentage points.
The countrys largest lender State Bank of India, Andhra Bank and Bank of India were among the first to cut base rate in the range of 0.
According to Reserve Bank of India (RBI) guidelines, no bank can offer loans at a rate lower than the base rate.
The TSC were told by Carney that in five years time he expects the base rate to be "materially below" the historic average of 5%.
The base rate logic, however, does not apply to NBFCs, including captive financing arms, which can offer rates below 10%.
Even those on a fixed rate mortgage aren't as confident in their mortgage knowledge as they should be, as 20% state they are unsure what effect an increase to the base rate would have on their personal monthly mortgage repayments.
While HDFC Bank had increased its base rate by 25bps to 7.
What's proposed: Base rate to replace BPLR from April 1, 2010.
has filed an application with the Arkansas Public Service Commission for a $223 million increase in its non-fuel rates, otherwise known as base rates, but company officials say they expect fuel cost reductions will result in slightly lower customer bills overall.
5 per cent below the base rate during the past two years.