What are interest rates?
The interest rate indicates how much we will pay for a loan or earn on savings.
Specifically, this is a cost that a counterparty must incur if he wants to gain access to
liquidity / money (capital).
A commercial bank can be a counterparty, i.e. a borrower, if it obtains liquidity
at the National Bank of Poland. Then the NBP acts as the lender, often referred to
as: lender of last resort. In this situation
the price of capital acquisition by a commercial bank is determined by the so-called interest rates
Of the National Bank of Poland determined by the Monetary Policy Council.
If a commercial bank raises capital from depositors, it must pay for the deposits placed
customers a certain percentage of accepted deposits. A commercial bank can also borrow
liquidity from other commercial banks and then the so-called foot
WIBOR (Warsaw Interbank Offered Rate), which sets the price of money on the interbank one
money market.
The essence of the interest rate itself, however, remains unchanged - it is the price that needs to be paid
pay for raising money if you are the borrower and the price you get
lender (depositor) for providing funds.