Base point

Base point ( ‱ ) ( English basis point ) is one hundredth of a percentage point (i.e. 1 basis point = 0.01 percentage points). It is usually denoted as ‱ , and less commonly as pro myriad .

Used to indicate changes in interest rates on financial instruments to eliminate ambiguity. For example, the rate was 10% and it is announced that it has been increased by 1 percentage point. This means that the new value will be 10% + 1% = 11%. But you can understand that the increase occurred by 1% from the previous value: 10 × (100 + 1) / 100 = 10.1%. Therefore, interest rate changes are indicated in basis points. The announcement of a rate increase of 20 basis points for our example will mean 10% + 0.01% × 20 = 10.20%.