InvestorQ : What are the key factors that go into the determination of interest rates?
Rashi Mehra made post

What are the key factors that go into the determination of interest rates?

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Angel dcosta answered.
2 years ago
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When we talk of interest rates, there are different types of interest rates - rates that banks offer to their depositors, rates that they lend to their borrowers, the rate at which the Government borrows in the bond / G-Sec market, rates offered to small investors in small savings schemes like NSC rates at which companies issue fixed deposits etc.

The factors which govern the interest rates are mostly economy related and are commonly referred to as macroeconomic. Some of these factors are:

Demand for money

Government borrowings

Supply of money

Inflation rate

In addition, the interest rates are also influenced by the Reserve Bank of India and the Government policies which determine some of the variables mentioned above.

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