The Bank Rate is the interest rate at which a country's central bank, such as the Federal Reserve in the United States or the Bank of England in the UK, lends money to commercial banks. This rate influences the overall economy by affecting borrowing costs for banks, which in turn impacts interest rates for consumers and businesses. When the Bank Rate is lowered, borrowing becomes cheaper, encouraging spending and investment. Conversely, raising the rate can help control inflation by making loans more expensive. Thus, the Bank Rate is a crucial tool for central banks to manage economic stability.