1The minimum interest rate set by the US Federal Reserve (and some other national banks) for lending to other banks.
- The discount rate is essentially the interest rate that banks and other depository institutions are charged to borrow from the Federal Reserve.
- A key vote on a proposed increase in the discount rate occurred at a Federal Reserve Board meeting on December 3.
- The Dow has rallied in the last two weeks following the last cut in the discount rate by the Federal Reserve.
2A rate used for discounting bills of exchange.
- In this economic environment the average discount rate on Treasury bills is 4.95 per cent.
- Discounting means selling the bill for cash at a discount, which depends on the discount rate and the number of days the bill has to run to maturity.
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