A bank finds itself short of desired reserves and therefore borrows from another chartered bank.What is the term for the interest rate on this loan?

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The interest rate on a loan between chartered banks is known as the overnight rate. This is because the loan is typically repaid the following day, hence the term "overnight". The other options listed - liquidity rate, prime rate, and discount rate - refer to different types of interest rates in the banking industry, but they do not apply in this scenario of a inter-bank loan.

A Bank Finds Itself Short of Desired Reserves and Therefore