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Questions
Define bank rate.
Define the following term:
Bank Rate
What is bank rate?
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Solution 1
Bank rate is the rate at which the central bank provides credit to commercial banks.
Solution 2
The ‘bank rate’ or ‘discount rate’ refers to the interest rate at which the central bank provides loans and advances to commercial banks or rediscounts their approved bills of exchange and government securities. By adjusting this rate, the central bank regulates the amount of credit available in the economy.
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