Bank Rate

The bank rate is the interest rate at which a country's central bank lends money to commercial banks. It influences the overall cost of borrowing in the economy. When the central bank raises the bank rate, borrowing becomes more expensive, which can slow down inflation and reduce spending. Conversely, lowering the rate makes borrowing cheaper, encouraging more spending and investment. The bank rate is a key tool used by central banks to help manage economic growth, inflation, and financial stability.