The financial industry usually uses the basis point to indicate the interest rate change of financial instruments, or the difference (price difference) between the two interest rates (including the yield of fixed-income securities).
Because some loans and bonds may usually be related to some indexes or basic securities, they are usually called indexes (or declines). For example, a loan with an annual interest rate of 0.50% higher than LIBOR is said to be 50 basis points higher than LIBOR, which is usually expressed as "L+50bps" or "L+50" for short.
Extended data
BP generally does not appear in specific foreign exchange transactions. It is used to describe changes in bonds and interest rates. BP is the smallest unit to measure the change of interest rate of bonds or promissory notes, and 1 basis point is equal to 0.0 1%, that is 1%. For example, when the Fed raises interest rates, it often says that it will increase by 25 basis points. This base point is BP, which means an increase of 0.25 percentage points.
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