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What is policy rate?

Update date:  15 Feb 2022, 19:45

The key policy rate of Central bank is the main instrument of monetary policy under the inflation targeting regime, which is the benchmark interest rate on monetary operations of the Central Bank with commercial banks. By changing policy rate, the Central Bank will determine the monetary conditions necessary to ensure price stability in the economy.

The main operations of the Central Bank with commercial banks to provide and attract liquidity (deposits, REPO and SWAP auctions up to 2 weeks) are carried out around the key policy rate. They play crucial role in determining interest rates on banking services (loans and deposits) through their impact on transactions in the interbank money market.


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