However, it should be noted that there are many factors that affect commodity prices. In addition to the market interest rate, the price of bulk commodities will also be affected by the relationship between supply and demand of commodities themselves. If the market supply exceeds demand, the price will usually fall. On the contrary, when demand exceeds supply, prices may rise.
Raising interest rates is a purposeful behavior of the central bank or ordinary commercial banks (including non-bank financial institutions) to raise one or part of the existing interest rates, usually to achieve a specific goal.
In a narrow sense, raising interest rates is the behavior of the central bank of a country or region to raise interest rates, which usually refers to raising deposit interest and loan interest, thus increasing the borrowing cost of commercial banks and other financial institutions to the central bank, and then forcing the market interest rate to increase. The purpose of raising interest rates includes reducing money supply, curbing consumption, curbing inflation, encouraging private deposits, slowing down or curbing market speculation and so on. Raising interest rates can also be used as an indirect means to increase the value (exchange rate) of domestic or local currencies against other currencies. 1992 September 16, the Bank of England raised the interest rate of the pound twice in one day, trying to stop the financial tycoon george soros from attacking the pound. This is a typical example of raising interest rates in modern financial history.
Generally speaking, the direct purpose of raising interest rates is to force commercial banks to borrow from the central bank at a higher cost, and then force interbank lending rates (such as overnight lending rates and interbank lending rates) to increase the cost of short-term financing in the entire financial market and curb malicious speculation.
Raising interest rates is not only an economic behavior, but also the product of multiple political and social factors. Sometimes it is probably not for economic purposes, but under pressure.
For example, a country or region will cut interest rates to increase the money supply when its (or local) currency continues to appreciate, which can achieve the purpose of restraining the currency appreciation (there are many preconditions for this behavior to succeed), but the country or region will face new pressure of rising prices and have to raise interest rates to stabilize prices (if interest rates are cut, prices will rise further).