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equanimity
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Posts: 29
Joined: April 30th, 2013, 2:54 am

Cash Rates vs. Deposit Rates

December 7th, 2016, 1:56 pm

On the Bloomberg "Swap Curve Builder" screen, I see that there is a choice between "cash rates" and "deposit rates" for the short-end instrument type.  What is the difference between these two?  Thanks!
 
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Martinghoul
Posts: 3256
Joined: July 18th, 2006, 5:49 am

Re: Cash Rates vs. Deposit Rates

December 7th, 2016, 2:55 pm

The wisest course of action would be to ask BBG help.
 
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acastaldo
Posts: 1416
Joined: October 11th, 2002, 11:24 pm

Re: Cash Rates vs. Deposit Rates

December 7th, 2016, 4:39 pm

According to BBG doc: "Cash rates are the interest rates at which banks can borrow funds from other banks in the market." Deposit rates are not explicitly defined but presumably are rates which banks can earn by depositing funds with other banks.
 
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ppauper
Posts: 70239
Joined: November 15th, 2001, 1:29 pm

Re: Cash Rates vs. Deposit Rates

December 9th, 2016, 1:25 pm

According to BBG doc: "Cash rates are the interest rates at which banks can borrow funds from other banks in the market." Deposit rates are not explicitly defined but presumably are rates which banks can earn by depositing funds with other banks.
according to your definition, if bank A lends money to bank B, A's deposit rate would be B's cash rate?
 
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acastaldo
Posts: 1416
Joined: October 11th, 2002, 11:24 pm

Re: Cash Rates vs. Deposit Rates

December 13th, 2016, 2:16 pm

 
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ppauper
Posts: 70239
Joined: November 15th, 2001, 1:29 pm

Re: Cash Rates vs. Deposit Rates

December 13th, 2016, 4:12 pm

which jurisdiction is the original poster in?
in the US, in addition to borrowing money from other banks (at the fed funds rate, 0.5%), it's possible to either borrow money from the Fed (at the discount rate, 1%) or earn money on deposits at the Fed (0.5%)
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