My Money

The level of interest rates can be used to determine how profitable your investments are or how much you pay for money that you borrow. The cost of goods often factors into account the level of interest rates which often affects the cost of production...the areas in which interest rates affect us are limitless.

Interest Rates and the Cost of Borrowing
Central banks (an example would be Bank of Botswana) use official interest rate instruments to achieve different outcomes in the economy. In Botswana, the key official rate is the bank rate, which is set by Bank of Botswana, which is then used by commercial banks in determining rates at which they can lend to the their customers. This rate is reviewed on a frequent basis and may be increased or decreased depending on what the Central Bank wants to influence.