Basis Point (BPS) | What is a basis point (BPS)?


What is a basis point (BPS)?

The basis point is called the hundredth part of 1%. Basis point is used mostly in such context, where the intervals of less than 1% to be considered. A key example of this is the interest rates in the financial market where fluctuations can usually be less than 1%. It is more convenient  to talk in basis point. That is, the difference of 0.10% will be called a change of 10 basis points. One basis point is equal to 1/100th of 1%, or 0.01%.Basis point is typically expressed in the form of "bp", "bps", or "bips."
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For example :-Increasing the repo rate by 25 basis points (25/100) from 7.5% to 7.75%. In other words 100 basis points would mean 1%.





 
Basis Points
Percentage Terms
1
0.01%
5
0.05%
10
0.1%
50
0.5%
100
1%
1000
10%
10000
100%




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