Real policy interest rate (lending rate minus inflation, %)

This statistic shows the “real” cost of borrowing in an economy by subtracting consumer-price inflation from the nominal lending interest rate. When the value is positive, borrowing costs exceed inflation (money is becoming more expensive in real terms). When it’s negative, inflation outpaces lending rates, meaning borrowers repay in money that is losing purchasing power.

Because it combines two core macroeconomic forces—interest rates and inflation—real interest rates are a concise signal of monetary tightness, credit conditions for households and firms, and potential stress for borrowers. In high-inflation episodes, real rates can become deeply negative even when nominal rates are high, while in low-inflation environments moderate nominal rates can translate into strongly positive real rates.