Borrowing Rate

Why Should The Federal Reserve Not Further Lower The...

New postby Tony » 23 Oct 2012, 07:44

Why should the federal reserve not further lower the borrowing interest rate?

Alright, I am doing a debate tommorow, I get what the "Fed Fund Rate" is and stuff, and I can see why it can be good or bad, But ultimately, what are some of the best reasons the borrowing rate Bank to Bank (1%) and Reserve to Banks (1.25%) SHOULD NOT BE LOWERED?
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New postby Elenore » 23 Oct 2012, 07:44

What's inhibiting lending is not the cost of funds, but the perceived risk. Lowering Fed open market rates isn't going to have a whole lot of impact in the short run.
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What is the difference between lending rate and borrowing...

New postby Colette » 23 Oct 2012, 07:44

What is the difference between lending rate and borrowing rate? What is the difference between lending rate and borrowing rate?
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New postby Malcom » 23 Oct 2012, 07:45

The lending rate is made up of the: Discount Rate, or the Federal Funds Rate. These are the interest rates set by the Federal Reserve that banks have to pay when they need to borrow money when they run out of excess reserves [the money that they are required to hold in case people want to make large withdrawls].

The lending rate is determained by market supply and demand. In other words the interest rate charged on loans to the public is determained by how many banks are willing to offer loans and how many people want to take out loans.
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Why massive selling on currency will shoot up the...

New postby Margrett » 23 Oct 2012, 07:45

Why massive selling on currency will shoot up the overnight borrowing rate?

I am reading about the hedge funds that attack the Asian economy, but 1 point that i dont understand is when the public started selling HK$ in the market, it cause overnight interest rate to shoot up to as high as may be 150%.

why more supply in HK$ will increase the interest rate?

Isnt because the country wants to keep the currency exchange rate peg, so it needs to increase the interest rate?
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New postby Clementina » 23 Oct 2012, 07:45

To keep the value of the currency intact i.e. to prevent rapid devaluation. It has the option of pegging its currency but this will affect its competitiveness in the global market place.
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What type of monetary policy is the overnight...

New postby Kathaleen » 23 Oct 2012, 07:45

What type of monetary policy is the overnight lending/borrowing rate? What type of monetary policy is the overnight lending/borrowing rate?
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New postby Caryn » 23 Oct 2012, 07:45

The rate is establish by law and it varies from state to state!!!
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What is the current interest rate in China? I need the...

New postby Chieko » 23 Oct 2012, 07:45

What is the current interest rate in China? I need the prime lending and borrowing rates. REFERENCES CRUCIAL
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New postby Gia » 23 Oct 2012, 07:45

Their economy is increasing at 17% a year. I know that's not what you're looking for, sorry.
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