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An interest rate is the price of money, i.e. the cost that must be paid for a loan or revenue that is earned from saving money, e.g. in a bank account.

The Central Bank’s key interest rate (sometimes called the policy rate) is the interest rate in transactions with credit institutions that most determines the development of short-term interest rates in the market and thus the level of restraint in monetary policy. The bank's current key interest rate is the interest rate on seven-day term deposits of credit institutions at the Central Bank.

Higher Central Bank interest rates generally lead to increased saving, less borrowing, less consumption and investment, and thus to less demand for goods and services, which should lead to lower inflation than otherwise.