Interest rates

The return for lending money, and the cost of borrowing it. The level of interest rates depends on the time value of money, the credit risk of the borrower, the level of inflation and other factors. Short-term rates are generally set by, or are closely linked to, the decisions of the country’s central bank. Long-term interest rates, including long-term bond yields, are affected by the balance between the supply of savings and the demand for credit.