What is a Basis Point?

With all the Reserve Bank of Australia’s (RBA) movements lately, you might have heard basis point on the news a few too many times.

So what is a basis point?

A basis point is 0.01%

So for example if you’ve heard the RBA drop the rates by 25 basis points, it means they’ve dropped the rates by 0.25% so a basis point is 0.01%.

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