noun
- the practice by a central bank of discounting commercial paper that has already been discounted by another bank
Usage: banking; finance
Examples
- The Federal Reserve uses rediscounting as a monetary policy tool.
- Banks can obtain liquidity through rediscounting eligible securities.
- Rediscounting helps maintain stability in the financial system.
- The central bank’s rediscounting operations provide emergency funding.
- Commercial banks rely on rediscounting during credit shortages.
- Rediscounting rates influence overall market interest rates.