Definition of Interest Rate
The rate at which a central bank lends money to commercial banks. Interest rate decisions are among the most powerful drivers of currency movements. Higher rates attract foreign capital and strengthen the currency.
At a glance
Term
Interest Rate
URL slug
interest-rate
Category
General
Short answer
The rate at which a central bank lends money to commercial banks.
Deep dives
Full A–Z glossary
Example
Apply the definition: restate “Interest Rate” in one sentence tied to your next trade (symbol, direction, size, stop). If you cannot, re-read the definition above.
Common mistake
Common mistake: using “Interest Rate” as loose slang while your broker/platform specification defines it more narrowly.
Professional tip
Tip: bookmark this “Interest Rate” page and reopen it when reading broker specs so definitions stay consistent.
Practice tools:
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FAQ
The rate at which a central bank lends money to commercial banks.
Knowing the precise definition of “Interest Rate” prevents platform and broker-spec mistakes—a common source of size and cost errors.
Common mistake: using “Interest Rate” as loose slang while your broker/platform specification defines it more narrowly.