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Public purification is a term used as a reference interest rate when central banks lend money to financial institutions.
In the past, it was the center of financial policy, but in the current investment news, policy interest rates and market interest rates are more important.
In this article, we will organize the meaning of public interest, the difference between policy interest, the impact on stocks, bonds and exchanges for beginners.
First Con まず
The public interest rate is the basis of when the central bank lends funds to financial institutions such as banks.
In Japan, it was used as a representative interest rate in the financial policy of the Bank of Japan.
However, the Bank of Japan has announced that it is a standard discount rate and standard lending interest rate.
The importance of investor’s daily news is the direction of policy interest and the movement of market interest rather than the public interest itself.
First,
Public interest rates for banks and policy interest rates, which were important in the past financial policies, are the interest rate that the current market is focused
It is easy to organize if you understand.
What is a public orientation?
Public purification refers to the standard interest rate when the central bank lends money to private banks, etc.
Banks may borrow money from the Central Bank when the funds are insufficient.
If the loan interest rate rises at that time, the financing cost will rise to the bank.
On the other hand, if the loan interest rate falls, the bank will be easier to borrow funds.
In the past, we had a strong impact on bank lending and corporate financing by moving the public walkway.
Why was it important?
Previously, the specific gravity of banks borrowing funds from the central bank is larger than now, and the change of public pursuant to the lending interest rate of financial institutions was easier.
The flow is considered as follows:
| Changes in Public Meeting | Impact on Banks | Impact on Scenic |
|---|---|---|
| 引き上げ | Increased procurement costs | Easy to rent |
| Close | Lower procurement costs | Easy to rent |
In other words, it was a tool to cool and support the economy.
When the interest rate rises, companies and individuals are less likely to borrow money, and consumption and investment are suppressed.
If the interest rate falls, the borrowing burden becomes lighter, making it easier to boost consumption and capital investment.
Why the importance has been lowered
Currently, the financing of financial institutions and market interest rates are changing from the past.
The Bank of Japan also explains that the former public s、uling is now positioned as a "standard lending interest rate" as an application interest rate of the supplemental lending system.
Complementary loan system is a mechanism that enables financial institutions to borrow short-term funds from the Japanese bank.
That’s why it’s important to understand the financial structure, but it’s not the first central indicator to see in investment news.
In the current market, statements and press conferences of policy interest rates, short-term interest rates, long-term interest rates, and central banks are attracted directly.
Difference between public interest and policy interest rate
The public interest and policy interest rates are both related to the central bank, but the meaning is not the same.
| 項目 | Contact Us | PolicyInterest |
|---|---|---|
| Main target | Banks and other financial institutions | Market interest rate environment |
| Function | Central Bank Rental Standards | Financial Policy |
| Current | Subsidy | High |
| Investor's Points | Understanding financial systems | Influence on Share Prices, Bonds and Exchanges |
In the past, it was important to read the financial policy.
"Seeing the direction of the policy interest rate" helps to understand the news and investment environment.
Impact on the investment market
Interest rate affects all of the stocks, bonds and exchanges.
Although the importance of the public orientation itself is lower, it is useful as an entrance to understand the idea of the entire interest rate.
StockMarket
Interest rate rise is generally inverted to the stock market.
However, the company's borrowing cost increases, making it easier to compensate for capital investment and profit.
However, there may be cases where the interest is raised against the background.
Therefore, it is important to see why the interest rate is rising rather than simply determining the interest rate rise ICOL stock.
Bond Market
The bond price and interest rate basically move in the opposite direction.
`r ↑ → Pbond ↓`
When the interest rate rises, the yield of newly issued bonds becomes attractive.
As a result, the price of existing bonds issued in low yields becomes easier to fall.
Currency Exchange
Currency in countries with high interest rates tends to be relatively easy to buy.
For example, if the U.S. interest rate is higher than Japan, the dollar is easier to buy, and it may move in a lower direction.
However, the exchange rate depends on economic, political, geopolitics, and investor requirements.
The exchange rate is not determined by the interest rate alone.
Easy for beginners
Not the same policy interest rate
In the past, the public interest was treated as a typical interest rate of financial policy, so it was told in a sense similar to the policy interest rate.
However, the focus of investors is policy interest and market interest.
In the news, it is natural to think that it is a policy interest first, not a public interest.
Interest rate rise is not always bad
There is a face to cool the spect in the interest rate rise.
On the other hand, there is a possibility that the interest is raised because it is strong and the price rise continues.
The important thing is not to see the number of interest rates.
It is to read whether the central bank wants to reduce the economy, want to reduce the inflation, or emphasize the stability of the financial market.
This term is used as a reference interest rate when the central bank lends funds to banks.
In the past, it was the center of financial policy, but now the policy interest rate and market interest rate are important for investors.
It is easy to understand that the policy interest rate is the core indicator of the current market.
First,
What is the market? Which central bank will move next than the level of interest?
With a viewpoint, understanding of stocks, bonds and foreign exchange news will be deepened.