Meaning
Basis Point (BPS) is a financial unit expressing tiny changes in percentages, commonly for interest rates.
Definition
One BPS equals 0.01% (one-hundredth of one percent). The full form is “Basis Point.” It standardizes precision.
How It Works
A 25 BPS change signifies a 0.25% shift. This avoids ambiguity when discussing small rate adjustments.
Common Usage
Financial professionals and central banks use BPS to detail movements in interest rates, bond yields, and other financial figures.
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