0
Repo rate is the rate at which banks borrow money from the central bank of that country. So if the central bank (say reserve bank of India) hikes its repo rate, it becomes costly for banks to borrow money from RBI so they in turn hike the loan interest rates at which customers borrow money from them to compensate for the hike in repo rate.
What else can I help you with?
When a bondholder loses money because interest rates in the economy increase it is an example of what kind of risk?
interest rate
What is the relationship between the yield and interest rate in financial investments?
The relationship between yield and interest rate in financial investments is that they are directly related. When interest rates increase, the yield on investments also tends to increase, and vice versa. This means that as interest rates go up, the yield on investments will also go up, and as interest rates go down, the yield on investments will also go down.
What is the relationship between yield and interest rate in the context of investments?
The relationship between yield and interest rate in investments is that they are directly related. When interest rates go up, the yield on investments also tends to increase. Conversely, when interest rates go down, the yield on investments typically decreases. This means that changes in interest rates can impact the return on investment for investors.
What is the relationship between interest rate and discount rate?
When interest rates increases currency value appreciates while when interest rate decreases so the currency rates depreciates
How does a rise in US interest rates affect the pounds exchange rate?
Increasing the interest rate generally lowers inflation so the price level change of the U.S. dollar would be less. This means that the exchange rate (USD/GBP) would increase more slowly and less overall than without the interest rate increase.
When a bondholder loses money because interest rates in the economy increase it is an example of what kind of risk?
interest rate
How can increase in interest rate be prevented?
It depends what country you're in.Most commonly, the Central Bank has the right tools (decreasing general interest rate towards national banks) to prevent the increase in interest rates.
What is the relationship between the yield and interest rate in financial investments?
The relationship between yield and interest rate in financial investments is that they are directly related. When interest rates increase, the yield on investments also tends to increase, and vice versa. This means that as interest rates go up, the yield on investments will also go up, and as interest rates go down, the yield on investments will also go down.
What is one potential effect of an increase in mortgage interest rates?
Increased mortgage rates for a homeowner mean their mortgage payments increase. Additionally, less money will go towards reducing the principle with an increased interest rate.
How interest rate affect the value of us dollar?
its actually the other way around. the value of the us dollar effects interest rates. the lower the us dollar is worth, the lower the interest rate
What is the relationship between yield and interest rate in the context of investments?
The relationship between yield and interest rate in investments is that they are directly related. When interest rates go up, the yield on investments also tends to increase. Conversely, when interest rates go down, the yield on investments typically decreases. This means that changes in interest rates can impact the return on investment for investors.
Why do bank savings account interest rates change over the years?
The interest rate at which they lend out money changes, which changes your interest rate. Banks are a buisness and if their interest rates are lower then your interest rates, they make no money on it. The interest rate taht banks pay is changed because the rate that banks pay to the govenrment changes. Whnever the federal reserve rate changes,your interest rates can change.
What does representative mean with regard to interest rates?
A representative interest rate is an interest rate that is exemplary or acrhetypical rate.
When you are earning interest is it better to have high or low rates?
High rates.However, high interest rates are usually a consequence of high inflation rates and so what matters is not the interest rate but the real interest rate which is the nominal interest rate relative to the inflation rate.Thus a 3% interest rate when inflation is 1% is better that a 5% interest rate when inflation is 4%.
What is the relationship between interest rate and discount rate?
When interest rates increases currency value appreciates while when interest rate decreases so the currency rates depreciates
How does a rise in US interest rates affect the pounds exchange rate?
Increasing the interest rate generally lowers inflation so the price level change of the U.S. dollar would be less. This means that the exchange rate (USD/GBP) would increase more slowly and less overall than without the interest rate increase.
How would low interest rates affect airlines?
Low interest rates positively affect airline industries because they lead to the investment of new technology and capital. This will increase the rate of return and increase the value of the infrastructure and services at lower costs, which will induce better quality and higher demand, which will financially benefit the airline industries with lower rates of inflation. High interest rates will actually increase inflation.
