What is Interest Rate?
Updated October 17, 2026
An interest rate is what a central bank charges to lend money, and it's a big driver of currency prices.
When a country raises rates, its currency often gets stronger because holding it pays more.
Rate decisions are some of the biggest market events of the year.
Rates also decide your swap fees on overnight trades.
Example
The US raises rates and USD climbs against the yen that week.
Questions people ask
Why do rates move forex?
Money tends to flow toward currencies that pay higher interest.
Should bots trade during rate news?
Many traders pause bots around big news because spreads and slippage spike.
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