Key interest

under key interest one understands the interest rate specified from the responsible central bank for the controlling of the monetary policy.

Most important key interests are the minimum offering set of the main refinancing instrument of the European central bank (since 8. March 2006 2.5 per cent), the Repo rate of the bank OF England (4.5 per cent since that 4. August 2005) and the nominal Federal of find rate of the American Fed (4.75 per cent since that 28. March 2006). Contrary to the main refinancing instrument, which exhibits a running time of one week, it acts with the Federal of find rate around the interest rate to that thoseUS banks money among themselves borrow, in order to adjust your balances in the context of the minimum reserve obligations with the central bank. Since this happens daily, one speaks there of overnight credit. The effective (actual) interest rate can deviate from the nominal, why to the controlling and adherence to the nominal interest charges formulated as a goalmainly open market business to be used.

These monetary political instruments become and. A. as key interests designates, because a large influence on the entire refinancing market and thus the liquidity in the respective currency area are attached to them. Historically relevant key interest sets were the rate of discount, to that clearing banks the changeswith the central bank to rediscount could, as well as the bank rate for collateral loans, to which securities were pawned with the central bank. Rediscounting played a subordinated role with acceptance of the traditional commercial bill business however increasingly, whereby the bank rate for collateral loans moved into the foreground. Since center of the 1980er years, at the latest however also, The open market business in the euro area became generally accepted and replaced assumption of the central bank business by the EZB thereby the bank rate for collateral loans as the most important key interest.

Web on the left of

Wiktionary: Key interest - word origin, synonyms and translations
 

  > German to English > de.wikipedia.org (Machine translated into English)