What Is a Composite Rate?
Interest rate refers to the ratio of the amount of interest to the amount of borrowed funds, or principal, within a certain period of time. The interest rate is the main factor that determines the cost of a company's capital, and it is also the decisive factor for corporate financing and investment. The study of the financial environment must pay attention to the status of interest rates and its changing trends. [1]
- [lì l]
- Interest rate refers to the ratio of the amount of interest to the amount of borrowed funds, or principal, within a certain period of time. The interest rate is the main factor that determines the cost of a company's capital, and it is also the decisive factor for corporate financing and investment. The study of the financial environment must pay attention to the status of interest rates and its changing trends. [1]
- In terms of expression, interest rate refers to the same amount of interest in a certain period.
- Interest rate pairs
- Historical data, unit:
- Historical data, unit: annual interest rate%
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| 2013 .. | |||||
| 2014.11.22 | 5.60 | 5.60 | 6.00 | 6.00 | 6.15 |
| 2015.03.01 | 5.35 | 5.35 | 5.75 | 5.75 | 5.9 |
- Interest rate refers to the ratio of interest to principal during a certain period of time. It is a factor and a criterion for determining the amount of interest. The interest rate as the price of funds has many and complicated factors. The level of interest rates is ultimately determined by the combined effects of various factors. First, the interest rate is affected by the determinants of the average profit level of the industry, the supply and demand of money, and the state of economic development. Second, it is affected by the price level,
- Calculation model and analysis of bank's reasonable interest rate:
- GDP nominal value = GDP actual value V *
- Since the reform and opening up, the People's Bank of China has strengthened the use of interest rate means.
- (I) Requirements of the market economy
- The development of the market economy requires the price of commodities to be liberalized, and interest rates as special commoditiesthe price of funds must also be liberalized. This is the need of market competition and the objective requirement of the market economic system.
- (2) It can promote banks to improve their management level. The liberalization of interest rates is also the need for competition between banks.
- Because if the interest rate is not liberalized, then the interest rates of the banks will be similar. In this way, competition will not be sufficient, and it will be difficult for the development of the bank to survive the fittest, which is equivalent to protecting backwardness. After the interest rate is liberalized, banks will face tremendous pressure on competition in deposit and loan interest rates. At this time, if banks do not improve their management level and service quality, the bank's profit level will be low, and banks will be disadvantaged in the competition of deposit and loan interest rates. Status.
- At that time, banks with high profit levels will be able to attract lenders by increasing deposit rates and reducing loan rates; banks with low profit levels will be in a dilemma. If they also take measures to increase deposit rates and reduce loan rates, because Without profit support, survival will be difficult. If the deposit and loan interest rates do not move, then customers will be lost.
- (3) Customers can get better service
- After the liberalization of interest rates, competition among financial institutions will enable our customers to get better prices and better services.
- Divided into simple interest and compound interest according to different calculation methods
- Simple interest means that during the borrowing period, interest is calculated only on the original principal, and interest on the principal is no longer calculated separately. Compound interest means that during the borrowing period, in addition to calculating the interest on the original principal, the interest generated by the principal must be recalculated into the principal and the interest calculated repeatedly.
- According to the relationship with inflation, it is divided into nominal interest rate and real interest rate
- The nominal interest rate is the interest rate that does not exclude inflation, that is, the interest rate indicated on the loan contract or document. The real interest rate is the interest rate after the inflation factor has been removed.
- According to different determination methods, it is divided into legal interest rate and market interest rate
- The official interest rate refers to the interest rate determined by the government financial management department or the central bank. Public interest rate refers to the interest rate determined by financial institutions or banking associations in accordance with negotiation methods. This interest rate standard is only suitable for financial institutions participating in the association and is not binding on other institutions. Interest rates. The market interest rate refers to the interest rate determined according to the tightness of the market capital loan relationship.
- According to different national policy intentions, it is divided into general interest rate and preferential interest rate
- The general interest rate is the interest rate without any preferential conditions. Preferential interest rate refers to preferential interest rate policies formulated for certain departments, industries, and individuals.
- According to different banking requirements, it is divided into deposit interest rate and loan interest rate
- The interest rate on deposits refers to the ratio of interest and principal received from deposits in financial institutions. The loan interest rate is the ratio of the interest paid to the principal of a loan from a financial institution.
- According to the supply and demand relationship with market interest rates, it is divided into fixed interest rates and floating interest rates
- A fixed interest rate is an interest rate that is not adjusted during the borrowing period. The use of fixed interest rates is convenient for both borrowers and lenders to calculate the benefits and costs, but at the same time, it is not applicable to the situation where interest rates will change significantly during the borrowing period. Changes in interest rates will cause significant losses to one of the borrowers.
- Floating interest rates are interest rates that are adjusted in response to changes in market interest rates during the borrowing period. The use of floating interest rates can avoid the risks caused by changes in interest rates, but at the same time, it is not conducive to the estimated benefits and costs of both borrowers and lenders.
- According to the change relationship between interest rates, it is divided into benchmark interest rates and hedged interest rates
- The benchmark interest rate is the interest rate that plays a decisive role under the condition that multiple interest rates coexist. China is the interest rate of the People's Bank of China on commercial bank loans.
- RMB exchange rate reform and
- Interest rate policy affects the exchange rate by affecting current accounts. When interest rates rise, credit tightens, loans decrease, investment and consumption decrease, prices fall, to a certain extent, imports are suppressed, exports are promoted, foreign exchange demand is reduced, foreign exchange supply is increased, foreign exchange rates are reduced, and local currency rates are increased. Contrary to rising interest rates, when interest rates fall, credit expands, money supply (M2) increases, stimulates investment and consumption, promotes price increases, is not conducive to exports, and is conducive to imports.
- The impact of exchange rate changes on interest rates is also indirect, that is, it affects interest rates indirectly by affecting domestic prices and short-term capital flows.
- On July 9, 2013, Shibor showed a decline across the board. The interest rate fell the most in 2 weeks, falling 8.20 basis points to 3.6040%, followed by the March interest rate and 1 week interest rate, which fell 7.10 basis points and 6.00 basis points to 4.7230. % And 3.5960%, overnight, January
- Interest rates fell slightly by 0.70 basis points and 0.20 basis points to 3.2490% and 4.2980%. The medium and long-term interest rates changed little in June, September, and 1 year, reported at 4.22155%, 4.2720%, and 4.4000%, respectively. The short-term inter-bank lending rate continued to decline significantly, indicating that the problem of inter-bank liquidity tensions in June has been somewhat alleviated in early July. [3]
- In terms of open market operations, following zero operations in the open market last week, the central bank continued to suspend open market operations on Tuesday, with neither repurchase operations nor issuing central tickets. Although the liquidity tension has been greatly eased since July, and the price of funds has steadily dropped, the central bank still suspended the issuance of central bank bills on Tuesday, dispelling the market's speculation about the restart of central bank bills and continuing to release signals for stability maintenance. According to Wind statistics, there is no central ticket and forward and reverse repurchase expiry in the open market this week.
- In terms of monetary policy, after experiencing a money shortage, to appease the market, the People s Bank of China suspended the open market operations and continued to slow down the tightening of liquidity in the interbank market, but this does not indicate that the central bank s tightly balanced policy stance has occurred change. It is expected that while closely monitoring domestic liquidity and fundamentals, the central bank will continue to regulate liquidity through the open market.
- Regarding various market speculations at the time, the central bank governor Zhou Xiaochuan said that during this round of tight liquidity events, the market basically understood the central bank's grasp of liquidity. In the future, the central bank will still adhere to a sound monetary policy and timely Regulate market liquidity and maintain overall market stability. Therefore, the neutral tone of monetary policy is expected to remain unchanged in the second half of the year.