THE RELATIONSHIP BETWEEN REFINANCING RATE AND GDP

Abstract

The refinancing rate is an instrument used by central banks to control the money supply and influence the overall economy. The refinancing rate, also known as the discount rate, is the interest rate at which commercial banks can borrow money from the central bank. By making it simpler for companies and individuals to borrow money, a decline in the refinancing rate promotes economic growth. The relationship between the refinancing rate and gross domestic product (GDP) is necessary, and understanding it is crucial for policymakers and investors alike. In this article we will see how they are related and in last a few decades they have influenced on each other in different countries.