Floating Rate

Floating Rate

Interest rate that is reset periodically, usually every couple of months or sometimes daily.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Floating Rate

Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Floating rate.

A debt security or corporate preferred stock whose interest rate is adjusted periodically to reflect changing money market rates is known as a floating rate instrument.

These securities, for example five-year notes, are initially offered with an interest rate that is slightly below the rate being paid on comparable fixed-rate securities.

But because the rate is adjusted from time to time, its market price generally remains very close to the offering price, or par.

When a nation's currency moves up and down in value against the currency of another nation, the relationship between the two is described as a floating exchange rate.

For example, the US dollar is worth more Japanese yen in some periods and less in others. That movement is usually the result of what's happening in the economy of each of the nations and in the economies of their trading partners.

A fixed exchange rate, on the other hand, means that two (or more) currencies, such as the US dollar and the Bermuda dollar, always have the same relative value.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

floating rate

A loan interest rate that is not fixed and does not have specified times for increase or decrease,but which floats and changes as the index changes.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Summary: New Delhi [India], Sept 4 (ANI): The Reserve Bank of India (RBI) on Wednesday issued a circular making it mandatory for banks to link all new floating rate personal or retail loans and floating rate loans to micro, small and medium enterprises to an external benchmark.
ANNOUNCES REDEMPTION OF GBP300,000,000 Undated Deeply Subordinated Fixed to Floating Rate Notes issued on October 26, 2009 (ISIN: FR0010814418 / Common Code: 045906221) AND EUR550,000,000 Undated Deeply Subordinated Fixed to Floating Rate Notes issued on October 26, 2009 (ISIN: FR0010814434 / Common Code: 045904890)
The State Bank of Pakistan (SBP) on Wednesday auctioned Pakistan Investment Bonds (PIBs) worth Rs 309.415 billion for 3, 5 and 10 years in fixed and floating rate bonds.Cut off Yields for the Fixed Rate Bonds increased by 55 basis points to 14.25 percent for 3 years, remained the same at 13.80 percent for 5 years while the 10 year Cut off declined by 15 basis points to 13.55 percent.
Borrowers who availed of dual rate home loans, which were hugely popular between 2009 and 2011, will be allowed to pre-pay loans during the floating rate phase without a penalty.
ARE YOU finding it hard to decide whether to go for a fixed home loan or a floating rate? Here's some advice that can help you choose the right kind of loan for yourself.
The primary Murabaha contract will see a floating rate payer buy a commodity from broker 1, and immediately sell the commodity to the fixed rate payer.
The loan carries a 7-year term and consists of a $10 million fixed rate portion plus a $20 million revolving line of credit divided into two floating rate tranches of $10 million each.
An exception is the Fidelity Floating Rate High Income fund (FFRHX)," says Morningstar Senior Analyst Scott Berry.
The final floating rate will be set at a fixed spread, currently 250 basis points above the prevailing one-month Reference Bill rate when the loan moves into the final floating-rate period.

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