The description of interest rates:
Federal Funds Rate – the interest rate, at which the
bank-members of The Federal Reserve System draw short-term credits overnight.
The decision about the fluctuation of the rate in federal funds is covered by
the Federal Open Market Committee (FOMC) terms of reference. The decision about
fluctuation of the key interest rate in the USA is made by the Federal Open
Market Committee (FOMC) of the Federal Reserve System of the USA during its
meetings. The Committee holds 8 meetings per year concerning the question of
the key interest rates fluctuation. The meetings are usually held on Tuesdays.
The first and the fourth meetings in the year are the exceptions, because they
are usually held for two days (Tuesday and Wednesday). The result of the
meeting is announced at 6.15 pm GMT either on the day of the meeting or on the
second day of the meeting if it is held for two days. The Minutes of the
meeting are published few days after the next meeting.
Refinancing Tender - the European analogue of the Federal
Funds Rate. Refinancing Tender is an interest rate, which is minimum possible
for requests for funds obtaining in the tender of European Central Bank. ECB
holds a tender each two weeks to float funds, which is necessary for upholding
the liquidity in the standard. The decision about key interest rates
fluctuation in Europe is made by the Governing Council of European Central
Bank. Since the 7th of January 1999 the Council meetings are held on Thursdays
once in two weeks. The exceptions in the meetings schedule are made only on
holidays and during the period of summer vacations in ECB.
Repo Rate – interest rate at which Bank of England offers
credits according to the repossession scheme, i.e. Bank of England buys the
short-term stocks from the banks with obligation to sell them to those banks in
certain stipulated time. The decision about key interest rates in the UK is
made by Bank of England Monetary Policy Committee on its monthly meetings. The
meeting of Bank of England Monetary Policy Committee is held for two days.
Usually it is Wednesday and Thursday which follow the first Monday of each
month. But sometimes there are exceptions when the meetings are held on Tuesday
and Wednesday. The result of the Monetary Policy Committee meeting is announced
at noon GMT on the second day of the meeting. The Minutes of meetings are
published on Wednesday following the week of the meeting.
3 Month LIBOR (London Interbank Offered Rate) Range - the
range for three months loans. Swiss National Bank establishes the corridor with
the range of one percent in which it is determined to hold the 3 Month LIBOR
interest rate.
Overnight Call Rate Target – Japanese analogue of Federal
Funds Rate. It is the interest rate at which Bank of Japan draws overnight
credits.
Official cash rate of Reserve Bank of New Zealand (RBNZ) is
used by Bank in order to regulate short-term cash rates on financial market.
Reserve Bank accepts funds from commercial Banks on deposit at cash rate, that
is on 0.25% lower than official cash rate and gives credits at cash rate, that
is on 0.25% higher than official cash rate.
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