The interest rate that commercial banks charge each other for the shortest period of borrowing or lending is called the

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The overnight interest rate refers to the interest rate that commercial banks charge each other for overnight loans, which are short-term loans that are meant to be repaid the following business day. This rate is determined by the supply and demand of reserves in the banking system, and is closely monitored by central banks as it can have an impact on the broader economy. Term interest rate and bank rate are typically longer-term rates, while prime rate and preferred lending rate are specific rates charged by banks to their most credit-worthy customers.

The Interest Rate That Commercial Banks Charge Each Other for the Shortest