Explanatory Notes on Interest Rate Concepts

Please click to access the document containing explanatory notes on various interest rate concepts (interest rates).

The document provides explanations addressing the following questions:

1. What are market interest rates?
2. What is the real risk-free rate of interest (k*)?
3. What is the nominal risk-free rate of interest (Krf)?
4. What is the inflation premium (IP)?
5. What is the default risk premium (DRP)?
6. What is the liquidity risk premium (LRP)?
7. What is the maturity risk premium (MRP)?
8. What is the reinvestment risk premium (RRP)?
9. What is the effective interest rate?
10. What is the real interest rate?
11. What are benchmark interest rates [government bond yields (DİBS)]?
12. What is the policy rate?
13. What are overnight interest rates (borrowing rate – lending rate)?
14. What are late liquidity window interest rates?
15. Which factors does the Central Bank of the Republic of Türkiye take into account when setting interest rates?
16. What is the rediscount rate?
17. What is the statutory (legal) rate of interest?
18. What is the default rate of interest?
19. What is the Turkish lira reference rate (TRLIBOR), and how is it determined?
20. What is LIBOR, and how is it determined?

I hope you find it useful.