How can the Bank of Canada use the bank rate to regulate the overnight loans rate?
A)The overnight loans rate is set at a quarter percentage point above the bank rate, which in turn is set by the Bank of Canada.
B)The bank rate is set at the settlement balances rate plus 0.25 percentage points.
C)The bank rate is set at 0.25 percentage points below the settlement balances rate, which is used to determine the overnight loans rate.
D)The overnight loans rate is set at 25 basis points above the bank rate.
E)The bank rate is set at the target overnight rate plus 0.25 percentage points.

Question

Quizplus · Accepted Answer

The bank rate is set at the target overnight rate plus 0.25 percentage points, which helps the Bank of Canada influence the overnight loans rate.

How Can the Bank of Canada Use the Bank Rate