What are basis points?

Question

what does it have to do with interest rates?

Answer 1

it is the basis upon which interest is to be calculated it is linked with the LIBOR rates.

1basis pt=0.01%

thus when rate of interests have to be adjusted as per the global markets ,the govt. uses basis pts. linked with libor rates.

thus when it is said that bank rate increase by 25 basis pts, it means it increases by 0.25%

Answer 2

A basis point is 1/100th of a percent.  100 basis points is equal to 1.00%

What is has to do with interest rates?  

It is a unit of measure.