Basis Point (BPS)

RECENT NEWS
Forbes  Feb 8  Comment 
Images of BP's 500-ton system to stop deepwater oil spills
The Economic Times  Feb 4  Comment 
"The data is likely supportive of further rate cuts and the policy will be supportive of rate cuts. So another 50 bps does not look unreasonable."
The Times of India  Feb 3  Comment 
The Reserve Bank of India (RBI) kept its policy rate unchanged at 7.75% during its monetary policy review meeting on Tuesday, nearly three weeks after surprising the Street with a 25 basis points cut on January 15.
The Economic Times  Jan 16  Comment 
I would not be surprised if we end up the calendar year with 100 bps plus cut on the benchmark and this augurs well for the economy.
The Economic Times  Nov 11  Comment 
The new Reserve Bank framework for non-banking financial companies (NBFCs) is likely to bring down their profitability by around 40 basis points over the next four years, analysts said.
MarketWatch  Nov 7  Comment 
U.S. Treasury yields fell Friday after October nonfarm payrolls data from the Commerce Department showed the U.S. economy added 214,000 jobs in October. The benchmark 10-year Treasury yield saw a 2 basis point drop to 2.3697%. The 2-year yield...
The Times of India  Nov 5  Comment 
Leading public sector banks have lowered some of their term deposit rates by up to 100 basis points as credit growth remains sluggish and liquidity in money markets has improved (100 basis points = 1 percentage point).
newratings.com  Oct 31  Comment 
MOSCOW (dpa-AFX) - Russia's central bank lifted its key rate sharply by a bigger-than-expected 150 basis points to counteract the slide in ruble and rising inflation. The Bank of Russia decided on Friday to raise its key rate to 9.50...
MarketWatch  Oct 14  Comment 
Yield on 10-year Treasury note slides 11 basis points amid global growth fears
The Hindu Business Line  Aug 14  Comment 
Rates slashed for development and innovation projects




 

For the article on the company with ticker BPS, see BlackRock Pennsylvania Strategic Municipal Trust (BPS).

A basis point (abbreviated as 'bps' and sometimes pronounced "bips") is a unit that is equal to 1/100th of 1%, and is often used instead of percentages when discussing interest rates, rates of return, and other percentage-based performance metrics that can occur as fractions of a percent. The basis point is commonly used for calculating changes in interest rates, equity indexes and the yield of a fixed-income security.

It is common practice in the financial industry to use basis points to denote a rate change in a financial instrument, or the difference (spread) between two interest rates, including the yields of fixed-income securities.

1% change = 100 basis points, and 0.01% = 1 basis point.

So, a bond whose yield increases from 5% to 5.5% is said to increase by 50 basis points; or interest rates that have risen 1% are said to have increased by 100 basis points. The marginal effect of each basis point change in the value of long term bonds can be very significant for this reason changes are tracked by basis points or 1/100th of 1%

Since certain loans and bonds may commonly be quoted in relation to some index or underlying security, they will often be quoted as a spread over (or under) the index. For example, a loan that bears interest of 0.50% per annum above the London Interbank Offered Rate (LIBOR) is said to be 50 basis points over LIBOR, which is commonly expressed as "L+50bps" or simply "L+50"

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