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Deposit rate

Deposit rate refers to the interest rate that a bank pays to its depositors for the money they have deposited in their accounts. The deposit rate is determined by the central bank of a country and can affect the overall interest rates in the economy. When the central bank lowers the deposit rate, it becomes cheaper for banks to borrow money, and they are more likely to increase their lending, which can stimulate economic growth. However, a lower deposit rate can also result in lower returns for depositors. Conversely, when the central bank raises the deposit rate, it becomes more expensive for banks to borrow money, and they may reduce their lending, which can slow down economic growth. Higher deposit rates can result in higher returns for depositors, but can also increase borrowing costs for businesses and individuals.

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