1, average profit rate. The average profit rate is the highest limit of interest.

2. The relationship between supply and demand of loan capital. In the financial market, if the loan capital is short, the interest will rise, and vice versa.

3. Degree of risk.

4. International interest rate level.

5. National policies, legal provisions and social habits all have different degrees of influence on interest rates.

Extended data

Marx believes that interest rate is a part of surplus value and a manifestation of loan capitalists participating in surplus value distribution. Interest rates are usually controlled by the Bank of China and managed by the Federal Reserve. Now, all countries regard interest rate as one of the important tools of macro-control.

The influence of interest rate spread on exchange rate changes is more important than in the past. When a country tightens credit, interest rates will rise, which will lead to interest rate differences in the international market, which will lead to short-term capital flows internationally. Generally speaking, capital will always flow from low-interest countries to high-interest countries.

In this way, if the interest rate of one country is higher than that of other countries, it will attract a large amount of capital inflows, and the outflow of domestic funds will be reduced, leading to the snapping up of this currency in the international market; At the same time, the income and expenditure in the capital account have improved, and the exchange rate of the domestic currency has improved.

On the other hand, if a country loosens credit, the interest rate will fall. If the interest rate is lower than other countries, it will lead to a large outflow of capital, a decrease in the inflow of foreign capital, a deterioration in the balance of payments in the capital account, and the selling of currency in the foreign exchange market, leading to a decline in the exchange rate.

References:

Baidu encyclopedia-interest rate