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For your trading strategies you will need to consider the impact of the predicted rate change on your bank potential positions. For instance, if interest rates go up or down what will happen to the cost borrowing or return from investing? For instance think of this, if your bank is borrowing using longer term money market product, what will be the impact of a potential increase in interest rate within the coming weeks? What if your bank uses mainly very short term instruments (e.g. 90 days) and the borrowing agreements have to be renegotiated in 90 days?

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Category:- Basic Finance
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