Question

what is bank rate? ​

Answer 1

Answer:

Bank rate, also known as discount rate in American English, is the rate of interest which a central bank charges on its loans and advances to a commercial bank.

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Answer 2

In Economics or Finance,bank rate basically refers to the interest rate at which the central bank of any country provides short term loans to the commercial banks.Therefore,it is also the rate of lending by central bank to other banks in the country.

Explanation:

Bank rate is an important monetary instrument which the central bank use to regulate the economic activities in a country.During the recessionary phase in an economy,the central bank can reduce the bank rate and the interest rate of lending encouraging the banks to increase financial mobility or liquidity in the economy and to avoid any inflationary impacts in the economy,central bank can raise the interest rate to control the liquidity or financial flow in the economy as this would discourage banks from lending activities from central bank.