The key rate, often referred to as the policy rate or benchmark interest rate, is the interest rate set by a central bank that influences all other interest rates in an economy. Central banks adjust the key rate to either stimulate the economy by lowering it (making borrowing cheaper) or to control inflation by raising it (making borrowing more expensive). Changes to the key rate impact consumer loan rates, mortgage rates, and savings yields, making it a critical factor in economic growth and stability.