What is bank rate
Dear student.
Bank rate refers to the rate at which the Central Bank lends to the commercial banks. Bank rate is one of the important instruments of controlling credit and money supply in the economy.
An increase in the bank rate implies that loans for commercial banks from the Central Bank become expensive. The commercial banks in turn increase the rate of interest charged by them on the the loans they provide. This discourages the credit and loan in the economy.
Bank rate refers to the rate at which the Central Bank lends to the commercial banks. Bank rate is one of the important instruments of controlling credit and money supply in the economy.
An increase in the bank rate implies that loans for commercial banks from the Central Bank become expensive. The commercial banks in turn increase the rate of interest charged by them on the the loans they provide. This discourages the credit and loan in the economy.