The central bank raises the interest rate during periods of economic growth to control the volume of loans available to individuals and institutions In order to curb the inflation rate and in the event of an economic stagnation of a country, the state will reduce the interest rate and this will positively affect the stagnation, making the price of money cheap and increasing borrowing and consumer spending, and thus the state’s economy will recover and emerge from the economic stagnation, here traders can take advantage of the fluctuations in currency pairs due to a change Interest rates and interact with them correctly to achieve profits.

 

That higher interest rates in advanced economies, if driven by more stringent measures by central banks, would harm emerging market economies. Interest rates make borrowing more expensive and this helps reduce spending and inflation. The higher the interest rates for a currency, the higher its value and the higher the demand for it.