The central banks of Australia, Canada and New Zealand have eliminated reserve requirements and conduct monetary policy through a "channel" or "corridor" system.The "channel" or "corridor" refers to the spread between the central bank's:

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The "channel" or "corridor" system refers to the spread between the central bank's lending rate (the rate at which banks can borrow from the central bank) and its deposit rate (the rate paid on reserves held at the central bank). This spread creates a corridor within which the market interest rates typically fluctuate.

The Central Banks of Australia, Canada and New Zealand Have