What is a Call Money Rate?

Currency interest rate is also known as the "nominal interest rate" and "real interest rate" symmetry. For the first time, the American economist Irving Fisher proposed to calculate interest rates using two criteria: currency and physical lending. This division provides a tool for analyzing changes in interest rates under inflation. By calculating the difference between the currency interest rate and the inflation rate, you can grasp the actual interest rate that has a substantial impact on the economy, so it is of great practical significance to examine and manipulate the currency interest rate. The factors that determine the actual interest rate also determine the currency interest rate, such as the average profit rate, the supply and demand situation of the capital market, and the policies of the central bank. In addition, currency interest rates are closely linked to price levels. In the long run, the higher the rate of price rise, the higher the currency interest rate; in the short run, the growth rates of the two may not be consistent. The reasons for this are: sharply rising prices, weak investment, oversupply of funds, and difficulty in increasing the currency interest rate year-on-year; restrictions on central bank policies; currency interest rates lagging the price increase rate. ^[1]

Currency interest rate

Right!

Currency interest rate is also known as the "nominal interest rate" and "real interest rate" symmetry. For the first time, the American economist Irving Fisher proposed to calculate interest rates using two criteria: currency and physical lending. This division provides a tool for analyzing changes in interest rates under inflation. By calculating the difference between the currency interest rate and the inflation rate, you can grasp the actual interest rate that has a substantial impact on the economy, so it is of great practical significance to examine and manipulate the currency interest rate. The factors that determine the actual interest rate also determine the currency interest rate, such as the average profit rate, the supply and demand situation of the capital market, and the policies of the central bank. In addition, currency interest rates are closely linked to price levels. In the long run, the higher the rate of price rise, the higher the currency interest rate; in the short run, the growth rates of the two may not be consistent. The reasons for this are: sharply rising prices, weak investment, oversupply of funds, and difficulty in increasing the currency interest rate year-on-year; restrictions on central bank policies; currency interest rates lagging the price increase rate. ^[1]

Chinese name

Currency interest rate

Function

Bridge between exchange rate and money market instruments

Factor

Demand decision

Explanation

Cost of borrowing the currency

Interest rates are only determined by the supply and demand of the money market. The more people want to borrow, the higher the interest rate; the more people want to borrow, the lower the interest rate.