Banks can influence interest rates, regulating the offer of money through the establishment of bank reserves. To stimulate the economy, the central bank lowers the unemployment rate, increases the growth rate, revitalizes the real estate sector, goods, services, and financial markets.
The central bank is a government institution that controls the money supply in the national economy. When the central bank lowers interest rates, it aims to stimulate the economy. Conversely, when interest rates are raised, the central bank seeks to slow down the economy, which leads to reduced inflation and maintaining the purchasing power of the national currency.
