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discount rate

Syllabification: dis·count rate

Definition of discount rate in English:

noun

Finance
1The minimum interest rate set by the Federal Reserve for lending to other banks.
Example sentences
  • 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.
Example sentences
  • 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.

Definition of discount rate in:

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