{"id":26114,"date":"2013-05-18T13:23:58","date_gmt":"2013-05-18T07:53:58","guid":{"rendered":"http:\/\/vskills.in\/certification\/tutorial\/?p=26114"},"modified":"2024-04-12T14:18:33","modified_gmt":"2024-04-12T08:48:33","slug":"affects-of-interest-rate-change","status":"publish","type":"page","link":"https:\/\/www.vskills.in\/certification\/tutorial\/affects-of-interest-rate-change\/","title":{"rendered":"Effects of Interest Rate Change"},"content":{"rendered":"\n
\"Effects<\/a><\/figure><\/div>\n\n\n

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Effects of Interest Rate Change- The Central Bank usually raise interest rates when inflation is prophesied to rise above its inflation target. Higher interest rates tend to reduce economic growth. Higher interest rates raise the cost of borrowing, reduce disposable income, and therefore limit the increase in consumer spending. Higher interest rates tend to decrease inflationary pressures and cause an appreciation in the exchange rate. When interest rates change, there are real-world effects on the ways that consumers and businesses can access credit to make necessary purchases and plan their finances. It even affects some\u00a0life insurance\u00a0policies.\u00a0<\/p>\n

Change in the interest rate has certain effects on a bank with regard to various risks.<\/p>\n