When the economy is overheated, the central bank raises the benchmark interest rate of loans and increases the cost of loans, thus reducing the total amount of loans, reducing loan investment and eliminating economic overheating.

At this time, the central bank's actions are intended to show that tightening monetary policy, intentionally controlling unreasonable economic bubbles, and adjusting the macroeconomic operation state in order to achieve reasonable and stable growth.

On the contrary, if it is lowered, it means that the central bank has adopted a policy of loosening monetary policy, aiming at promoting investment, changing the economic depression caused by insufficient investment and promoting economic growth.