Discount Rate
The rate set by the Federal Reserve Bank for short term lending to eligible depository institutions. This interest rate is used to determine the present value of futures cash flows. The discount rate can influence currency exchange rates. Most lending is not done through this system and it seems to be more of a symbolic rate as it will imply policy decisions.
Lower discount rate: Federal Government trying to stimulate economy (increase amount of money in system)
Increase discount rate: Federal Government trying to reign in the threat of inflation (decrease amount of money in system)
→ NOTE:
http://www.investopedia.com/terms/d/discountrate.asp
http://www.forextradingfloor.com/index.php?page=articles&gparent_id=15&parent_id=15&type=view&cat_id=20
http://www.ibtimes.com/articles/20081021/the-monetary-policy-tools-of-the-federal-reserve.htm
Study Guide >> Forex Market Concepts >> Discount Rate