discount rate
noun Finance.
the rate of interest charged in discounting commercial paper.
the interest rate charged by Federal Reserve Banks on loans to their member banks, usually against government securities as collateral.
the rediscount rate.
Origin of discount rate
First recorded in 1925–30
Words nearby discount rate
discotomy,
discount,
discount broker,
discount house,
discount market,
discount rate,
discount store,
discounted cash flow,
discountenance,
discounter,
discourage
Cultural definitions for discount rate
discount rate
The rate of interest charged by the Federal Reserve System on loans it makes to the banking system.
notes for discount rate
Because the Federal Reserve System lends money to the banking industry, one mechanism it has for regulating
interest rates is to vary the discount rate — that is, to make the money that banks borrow relatively more or less expensive. It is likely to lower the discount rate during economic downturns to stimulate
investment and raise it during upswings to check
inflation.