Note: Default view displays data for the last 12 months
Interest rates are an important link between the current and future state of the economy. High interest rates are often associated with negative effects on economic growth prospects, and can affect the economy in the following ways:
Of course, the effects of lower interest rates are the opposite to the cases above, and can provide a positive environment for economic growth. It is also important to understand how interest rates affect bonds. There is an inverse relationship between bond prices and interest rates. This means typically as interest rates rise, bond prices fall, and as interest rates fall, bond prices rise.
Bank Rate: The bank rate is the minimum rate at which the central bank will lend money to domestic banks.
Overnight Rate: The interest rate set in the overnight market in which financial institutions lend each other money on an overnight basis. It is the lowest available interest rate and available only to the most creditworthy institutions. As the overnight rate is influenced by the central bank, it can be used as a good predictor for the movement of short-term interest rates for consumers in the broader economy. It is also a good indicator of the health of a country’s overall economy and banking system.