The lending rate is the real-time interest rate generated by banks, and the repo rate is the real-time interest rate generated by the bond market. Because they are all real-time, although the market traders are different, they maintain a positive correlation. The rise in interest rates indicates that the market funds are tight and it is impossible for funds to enter the stock market. On the contrary, funds may flow out of the stock market and have a negative impact on the stock market. If the stock market is hot, the crazy speculation of funds may attract funds to enter, causing these two interest rates to rise, which are also short-term and have different causal relationships.

Further reading

The loan interest rate is also called "loan market". The ratio of loan interest to loan principal in the loan market. Generally, the market free interest rate is adopted, and it is free to float according to the supply and demand of market funds. When demand increases, it will rise, and vice versa. Three interest rates widely used in the international market are London Interbank Offered Rate (LIBOR), Singapore Interbank Offered Rate (SIBOR) and Hong Kong Interbank Offered Rate (HIBOR). Interest rate is usually calculated on a daily basis and expressed as a percentage, which is divided into three forms: annual interest rate, monthly interest rate and daily interest rate.

The impact of interest rate changes

It has two kinds of interest rates, the loan interest rate indicates the interest rate that banks are willing to lend; The loan interest rate indicates the interest rate that the bank is willing to lend. Lending by one bank (borrowing from other banks) is actually lending by another bank (providing loans to other banks). Compared with the loan interest rate of the same bank, the lending rate is always less than the lending rate, and the difference is the interest of the bank.

If the interbank lending rate is raised, it will lead to a decrease in interbank lending, that is, a decrease in lending funds. The reduction of borrowing funds is not conducive to the financing. If it is beneficial, appropriately raising the interbank lending rate can increase the income of banks with sufficient reserves, but it will increase the expenditure of banks with insufficient reserves, that is, banks with low capital adequacy ratio.

Macroscopically, if the interbank lending rate is raised, banks will inevitably reduce loans and ensure a certain amount of capital to meet daily operations.

The reduction of loans will slow down the financing and turnover of social capital. Not conducive to economic development. However, raising the interbank lending rate can also play a certain role in curbing inflation.