11/06/2023
Interest Rates and Inflation
Everyone asks why RBA increases the interest rate and how to control inflation with interest rate. It is a very complicated mechanism, and every central bank faces many difficulties balancing the acts in the economy. Basically, the RBA tries to manage the economy's demand and supply through interest rate changes. This is called monetary policy.
When the economy slows down economy will go into recession when the economy goes into a recession and RBA or Central Bank will reduce the interest rate again to reverse the cycle.
