When demand for liquidity outstrips supply (rate increase in a credit crunch) then the law of supply states that quantity supplied also increases with price (rate decrease provided demand stays constant). That’s what central banks do so where’s the manipulation there?
Interest rates are a key link in the economy between investors and savers, as well as finance and real economic activity.
Markets for liquid credit function just like other types of markets, according to the laws of supply and demand.
When an economy enters a recession, demand for liquidity increases while the supply of credit decreases, which would normally be expected to result in an increase in interest rates.
A central bank can use monetary policy to counteract the normal forces of supply and demand to reduce interest rates, which is why we see falling interest rates during recessions.