Interest Rate Instruments Use. An interest rate instrument is a money market transaction with additional structural characteristics, such as variable interest and installment repayment.. In order to calculate the corresponding interest receivables or payables, you must carry out an interest rate adjustment. Using the interest rate instrument function, you can flag the transaction to document that it has been processed in the back office. At this stage, you check the entries and add any missing data. When you save the transaction, the system fixes the data (actual records) and flags the transaction flows for posting. Creating an Interest Rate Instrument . Prerequisites. See Interest Rate Instruments and Processing Interest Rate Instruments.. Procedure. Choose Create.; Enter the Company code, Product type, Transaction type and the Business partner.; You can make the following entries in the Specifications area:; Currency: If you do not specify a currency when you create a financial transaction, the system