Interest rate, in terms of its manifestation, refers to the ratio of interest amount to total loan capital in a certain period, and is one of the important tools of macro-control. When the economy is overheated and inflation rises, it will raise interest rates and tighten credit; When the economy is overheated and inflation is controlled, interest rates will be lowered appropriately. Therefore, interest rate is one of the important basic economic factors;

The level of interest rate has a very important influence on the foreign exchange rate, and interest rate is the most important factor affecting the exchange rate. We know that the exchange rate is the relative price between the currencies of two countries. Like other commodity pricing mechanisms, it is determined by the relationship between supply and demand in the foreign exchange market;

Foreign exchange is a financial asset, and people hold it because it can bring capital gains. When people choose to hold their own currency or foreign borrowed currency, the first consideration is which currency can bring him greater benefits;

The yield of each country's currency is first measured by the interest rate in its financial market. If the interest rate of a currency rises, the interest income from holding the currency will increase, attracting investors to buy the currency, so it is good for the currency. #58852; The market is optimistic about support; If the interest rate falls, the income from holding money will decrease, and the attractiveness of money will weaken. Therefore, it can be said that interest rates have risen and the currency has strengthened; Falling interest rates, soft money;

The balance of payments in the capital account has been improved, and the exchange rate of domestic currency has been improved. On the other hand, if a country loosens credit, the interest rate will fall. If the interest rate level is lower than other countries, it will lead to a large outflow of capital, a decrease in foreign capital inflows and a deterioration of the capital account balance. At the same time, this currency will be sold in the foreign exchange market, leading to a decline in the exchange rate.