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nominal interest rate

   Also found in: Financial, Wikipedia 0.01 sec.
nominal interest rate
the real rate of interest plus the anticipated rate of price inflation.


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net (Staff Writer) Barclays Capital said it is launching the Barclays Capital Emerging Markets Asia Swap Index Family; which it says are investable indices designed to replicate the performance of nominal interest rate swaps in the Asian emerging markets.
First, shrinking prices push up the real cost of borrowing, which is defined as the difference between nominal interest rates and the expected inflation rate; if the latter is (increasingly) negative, the difference produces an ever higher real interest rates, which encourage saving over spending and investment.
According to the referred source, a 1% drop in the nominal interest rate can be linked with 1/2% to 1% rise in property prices after 1 year.
 
 
 
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