Since everything in the economy is connected, the determining factors influence each other. Let's talk about each of them separately.
Key rate of the Central Bank
KS is the percentage at which the Central Bank issues loans to commercial credit organizations. This value directly affects the cost of loans and the profitability of deposits. When KS is 15%, you need to prepare for the fact that you will have to overpay at least 16% on loans, and the average profit on deposits will be less than 14% per annum.
Inflation
Normally, the growth of prices largely determines the value of the KS. Most often, the Central Bank sets the KS slightly below the inflation rate and thus stimulates the lending sector: loans become available, which has a positive effect on economic development.
During periods of crisis, the relationship between the CU and singapore mobile database price growth becomes much more complicated. For example, in order to maintain the national currency rate, the Central Bank may overstate the CU. This measure will lead to higher credit prices, a slowdown in economic growth, a decrease in supply on the market and, as a result, an acceleration of inflation. In such a situation, it is not the CU that depends on price growth, but vice versa: the inflation indicator indirectly depends on the CU.
When a credit institution sets a percentage, it is primarily guided by the KS. But when setting other conditions, it still takes into account the rate of price growth:
when food prices rise quickly, short-term programs with descending interest rates gain popularity;
when prices stabilize, long-term programs with increasing profitability become relevant;
With average inflation rates, credit institutions may gravitate towards a ladder-based interest rate system.
To prevent savings from depreciating with a rapid rise in the price of goods, it is best to make short-term investments in various investment instruments. This will allow you to build a more flexible strategy that adapts to changing market conditions.