The central bank in most countries sets the rate it lends at,it does not dictate the rate at which banks lend either between themselves or to non-bank borrowers.

Question

Quizplus · Accepted Answer

The central bank sets the interest rate at which it lends to commercial banks, but it does not directly control the interest rates charged by those same banks to their customers or to each other. These rates are influenced by a variety of factors, including market conditions, competition among lenders, and borrower creditworthiness.

The Central Bank in Most Countries Sets the Rate It