Hi John
I understand that interest rate smoothing is when central banks gradually increase rates over a period of time and not all at once for various economic stability reasons
Matching is asset and liability management in relation to maturity periods but what is having a balance of fixed and variable rates known as, would this come under matching also or is it something different?
Thanks
Graham
Ask the Tutor ACCA FM
Interest Rate Smoothing/Matching
In relation to interest rate risk management, matching is not related to maturity periods.
For a good explanation of matching and smoothing, see the following technical article on the ACCA website:
https://www.accaglobal.com/uk/en/student/exam-support-resources/fundamentals-exams-study-resources/f9/technical-articles/hedging.html
Thanks very much for attaching the article John
Graham
You are welcome :-)
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