Interest Rate

Every nation or region has a central body that oversees the economic and monetary policies and to make sure that the financial system remains stable. 

One of the main tools in monetary policy is the interest rate. 

The interest rate is the amount at which local and national banks can borrow from the central bank, expressed as a percentage from the amount borrowed. 

The central bank will raise the interest rate to slow down the economy when the inflation is too high and likewise lower the interest rate to boost up the economy and increase consumer spending.

Check out the economic calendar for upcoming releases on monetary policy decisions. The releases often cause big price moves on the financial markets. 

Take note: economic indicator releases are often accommodated by high volatility.