The overnight rate is important because it is ________.
A) the primary indicator of the Bank of Canada's stance on monetary policy
B) the interest rate paid on federal debt
C) the interest rate charged on government loans
D) A and C only.

Question

Quizplus · Accepted Answer

The overnight rate is the primary interest rate used by the Bank of Canada to implement monetary policy. It influences all other interest rates in the economy, including those for loans and mortgages. Therefore, it is a significant indicator of the Bank of Canada's stance on monetary policy. B and C are incorrect because the overnight rate is not directly related to the interest rates paid on federal debt or government loans.

The Overnight Rate Is Important Because It Is ________