Under what circumstances should interest rates be raised? What is the purpose of raising interest rates, that is, what effect do you want to achieve?
Raising interest rates is an important decision to further consolidate the achievements of macro-control and maintain the good momentum of sustained, rapid, coordinated and healthy development of the national economy. Objective Raising interest rates is an act of purposefully raising some or some existing interest rates, usually to achieve a specific goal. For example, by raising the benchmark deposit interest rate, we can absorb deposits and reduce the money supply. Or increase the overnight rate of banks to increase short-term high financing costs and curb malicious speculation, and so on. Raising interest rates is not only an economic behavior, but also the product of multiple political and social factors. Sometimes it is probably not for economic purposes, but under pressure. For example, when a country's currency continues to appreciate, it lowers interest rates, thus increasing the money supply, which can achieve the purpose of restraining currency appreciation (there are many preconditions for this kind of behavior to succeed, which is a purely theoretical discussion), but the country is faced with strong pressure of rising prices and has to raise interest rates to stabilize prices (if interest rates are lowered, prices will rise further). Usually, the effect of raising interest rates cannot be reflected quickly, because it involves the whole economic system or the linkage mechanism of the financial system, and it takes a long time to show the effect (the specific time has not been studied or known). Therefore, it is really hopeless to expect the effect of raising interest rates to be reflected as quickly as anesthetic.