https://www.veritaswiki.org/index.php?action=history&feed=atom&title=Rediscount_RateRediscount Rate - Revision history2026-10-19T18:26:37ZRevision history for this page on the wikiMediaWiki 1.45.3https://www.veritaswiki.org/index.php?title=Rediscount_Rate&diff=71&oldid=prevToto: Created English encyclopedia entry on Rediscount Rate following Wikipedia-style standards2026-10-06T04:13:45Z<p>Created English encyclopedia entry on Rediscount Rate following Wikipedia-style standards</p>
<p><b>New page</b></p><div>The '''rediscount rate''' (also called the '''discount rate''' in some countries) is the [[interest rate]] at which a [[central bank]] lends money to commercial banks, typically against the collateral of eligible securities or by discounting (purchasing) bills of exchange. It is one of the traditional instruments of [[monetary policy]].<ref name="wiki">Wikipedia contributors, "Discount window".</ref><br />
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== Definition ==<br />
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The rediscount rate is the rate charged when a central bank extends credit to commercial banks. When a bank needs short-term funds, it can borrow from the central bank at this rate, using eligible assets as collateral. The rate is therefore the cost of obtaining liquidity from the central bank.<ref name="wiki"/><br />
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== Use as a policy tool ==<br />
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{| class="wikitable"<br />
! Action<br />
! Effect<br />
|-<br />
| Raising the rediscount rate<br />
| Makes central bank borrowing more expensive; contractionary.<br />
|-<br />
| Lowering the rediscount rate<br />
| Makes central bank borrowing cheaper; expansionary.<br />
|}<br />
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Because banks can usually borrow from each other in the [[interbank market]] at rates close to the policy rate, the rediscount rate is often set slightly above the market rate and functions as a ceiling on short-term interest rates. Its main role is to provide liquidity to banks facing temporary shortages and to signal the direction of monetary policy.<ref name="wiki"/><br />
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== Related concepts ==<br />
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The rediscount rate is distinct from, but related to, other policy rates and instruments, including the [[Deposit Reserve Ratio]], [[Open Market Operations]], and, in modern central banking, the interest rate on reserves. In many economies, the rediscount rate has been supplemented or partly replaced by other facilities, such as standing lending facilities.<ref name="wiki"/><br />
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== See also ==<br />
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* [[Monetary Policy]]<br />
* [[Deposit Reserve Ratio]]<br />
* [[Open Market Operations]]<br />
* [[Central bank]]<br />
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== References ==<br />
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<references /><br />
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[[Category:Economics]]<br />
[[Category:Monetary economics]]<br />
[[Category:Banking]]</div>Toto