refenansirovaniya rate is the most common and effective tools by which the state regulates the state of the banking sector.If earlier refinancing system was intended to oversee the circulation of money, in the modern world it is increasingly based on aid to credit institutions.And it should be noted that realized for many years, and quite successfully.
So refenansirovaniya rate is the percentage by which the country's National Bank provides commercial credit due to the presence in the latter time of financial difficulties.Thus, the government ensures the reliability of the individual credit institutions, and accordingly, the stability of the entire banking system.As is known, the collapse of a large commercial bank may result in the fall of others, which will inevitably lead to a crisis in the economy of the entire state, and possibly on a global scale.
refenansirovaniya In practice, the rate is set annually by the National Bank and approved by the monetary policy, developed jointly with state authorities.Of course, to get such a loan can not every organization, but only has a good reputation and high-quality credit history.Moreover, if the central bank there are doubts about the solvency of a potential borrower, it makes the final decision, based on an audit report by the Organization.After confirming the creditworthiness of the borrower is given a credit for a certain period, after which the commercial bank returns to take the sum with interest.
refinancing rate is the primary method of adjusting the volume of money in circulation.According to the legislation regulating the activities of credit institutions, annually approved by the National Bank of the basic aspects of monetary policy, in particular targeting the money supply is carried out, in other words, establishing limiting volumes.If in the process of analytical work revealed that the volume of money in circulation exceeds the limit, the rate of the Central Bank increased refenansirovaniya.This naturally leads to a rise in the cost of loans issued to the population.Then, potential borrowers have to significantly reduce costs due to lack of funds to pay for the loan.Accordingly, there is a reverse situation, if revealed a marked decrease in the money supply.Refenansirovaniya rate is reduced, it becomes profitable credit institutions borrow from the National Bank, and hence the interest on the loans granted to the population, is significantly reduced.
Thanks to refinance the state controls the rate of inflation, preventing the development of the depreciation of money.After all, when the refinancing rate reduced to the minimum limit, the amount of money in circulation is actively growing, and thus increases the purchasing power.Uncontrolled progression of this process leads to the devaluation of money and reduce the supply of products on the market.