Interest rates play a significant role in government fiscal policies by impacting borrowing costs and economic activity. When interest rates are low, borrowing becomes cheaper, which can stimulate investment and spending, leading to economic growth. Conversely, higher interest rates tend to discourage borrowing, potentially slowing down economic expansion. Governments monitor these rates to inform their fiscal decisions, such as adjusting taxes or implementing public spending initiatives. Additionally, changes in interest rates can affect inflation control and government debt management, illustrating the complex relationship between interest rates and broader economic strategies.