The
interest rate is the price paid by the central bank to commercial banks
deposits, whether for investment for one night or for a month or more. This price is an indication of the interest rates of commercial banks, which should not be less than central bank rate,
Also helps the central bank interest rate in the control of the money
supply in circulation by changing this price up and down over the medium
term. The
rate hike means to curb borrowing and thus reduce the level of
liquidity in the market thereby reducing the rate of inflation (rising
prices).
Factors that determine the interest rateInterest rates are determined based on the forces of supply and demand, if rates increased demand for what is on offer from the funds will lead to higher interest rates at the same time will reduce lending rates in the economic sphere. Interest rates are influenced by the scale height
The decline in capital markets different, where interconnected financial markets as a result of the movement of funds within these markets, the market is financial characterized prices usefulness rise attracts capital in search of higher profitability standing, the supply of these funds, and this in turn leads to reduced price any interest rate responsive to the forces of supply and demand, at the same time expel low-interest markets capital resulting in a decrease in the supply of a factor in a high interest rate. As well as the consequent flourishing economic situation rise in interest rates, where interest rates tend to rise in each period where economic institutions need to finance in response to increasing production if the economic recovery takes the demand rises on capital, which works to raise the price
Factors that determine the interest rateInterest rates are determined based on the forces of supply and demand, if rates increased demand for what is on offer from the funds will lead to higher interest rates at the same time will reduce lending rates in the economic sphere. Interest rates are influenced by the scale height
The decline in capital markets different, where interconnected financial markets as a result of the movement of funds within these markets, the market is financial characterized prices usefulness rise attracts capital in search of higher profitability standing, the supply of these funds, and this in turn leads to reduced price any interest rate responsive to the forces of supply and demand, at the same time expel low-interest markets capital resulting in a decrease in the supply of a factor in a high interest rate. As well as the consequent flourishing economic situation rise in interest rates, where interest rates tend to rise in each period where economic institutions need to finance in response to increasing production if the economic recovery takes the demand rises on capital, which works to raise the price
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