bank rate

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Explanation of "Bank Rate"

Definition: The "bank rate" is the interest rate set by a central bank (like the Federal Reserve in the U.S. or the Bank of England in the UK) at which it lends money to commercial banks. This rate influences how much banks charge their customers for loans and how much interest they pay on savings.

Usage Instructions:

• Part of Speech: Noun
• Context: Typically used in discussions about finance, economics, and banking.

Example:

• "The central bank raised the bank rate to help control inflation."

Advanced Usage:

• Economists might discuss the impact of changes in the bank rate on the economy. For instance, a higher bank rate can lead to higher borrowing costs for individuals and businesses, which may slow economic growth.

Word Variants:

• There are no direct variants of "bank rate," but you might encounter related terms such as:
  • Interest Rate: A broader term that refers to the cost of borrowing money or the return on savings.
  • Discount Rate: Often used interchangeably with bank rate, but can also refer to the rate used to determine the present value of future cash flows.

Different Meanings:

In general, "bank rate" specifically refers to the rate set by a central bank. It does not have multiple meanings like some other English words.

Synonyms:

• Discount Rate: While slightly different in contexts, it can sometimes be used synonymously with "bank rate" in financial discussions.
• Central Bank Rate: This term is often used interchangeably with "bank rate."

Idioms and Phrasal Verbs:

There are no common idioms or phrasal verbs specifically related to "bank rate." However, you might hear phrases like: - "Raise the rate": To increase the interest rate, often used in discussions about monetary policy. - "Cut the rate": To decrease the interest rate.

Summary:

The term "bank rate" is crucial in understanding how central banks control monetary policy and influence the economy.

Academic

Noun

1. the discount rate fixed by a central bank