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Economist: Lowering interest rates encourages investment but carries caveats
- Time: 2024/10/27 09:25:29
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{Economic: Al Furat News} Economic expert Salah Nouri confirmed today, Sunday, that reducing the interest rate is one of the main tools of monetary policy used by the Central Bank to influence the economy, whether by increasing or decreasing it according to inflation or deflation rates.
Nouri explained in his interview with {Euphrates News} that “reducing the interest rate encourages individuals and companies to borrow for productive projects, which leads to stimulating the economy,” adding: “Lower interest makes the cost of loans lower, and thus encourages consumption and investment.”
Nouri pointed out that "reducing the interest rate reduces the cost of production and perhaps the prices of imported goods, which leads to a reduction in selling prices," but he warned that "reducing the interest rate may push depositors to withdraw their deposits due to the decrease in returns, and resort to alternative investments such as gold."
He added: "It is necessary for the Central Bank to monitor the money market and commodity prices to measure the level of inflation, especially since facilitating borrowing may affect the elasticity of demand versus supply."
From.. Raghad
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{Economic: Al Furat News} Economic expert Salah Nouri confirmed today, Sunday, that reducing the interest rate is one of the main tools of monetary policy used by the Central Bank to influence the economy, whether by increasing or decreasing it according to inflation or deflation rates.
Nouri explained in his interview with {Euphrates News} that “reducing the interest rate encourages individuals and companies to borrow for productive projects, which leads to stimulating the economy,” adding: “Lower interest makes the cost of loans lower, and thus encourages consumption and investment.”
Nouri pointed out that "reducing the interest rate reduces the cost of production and perhaps the prices of imported goods, which leads to a reduction in selling prices," but he warned that "reducing the interest rate may push depositors to withdraw their deposits due to the decrease in returns, and resort to alternative investments such as gold."
He added: "It is necessary for the Central Bank to monitor the money market and commodity prices to measure the level of inflation, especially since facilitating borrowing may affect the elasticity of demand versus supply."
From.. Raghad
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