What is a Bank Rate?
The bank rate is the interest rate which is used when a central bank such as the Federal Reserve System loans money to national banks. Changes in the bank rate have an impact on the amount of available money in a nation, and these rates are set by the central bank as part of an overall effort to keep economies healthy and stable. The bank rate is often set on a quarterly basis, and changes in the bank rate are usually a topic of immense interest to economists and the general financial community. Consumers are also impacted by the bank rate, as fluctuations in the bank rate may change the interest rates that they in turn receive for loans. A central banking system serves as a backup for national banks to ensure that the banking system in a country does not fail. The central bank is sometimes treated as a lender of last resort, and it may inject supplies of cash into a struggling economy. Central banks typically set monetary policies, and they supervise banking to ensure that banks behav
