In general,the bank rate is set above the overnight rate to discourage banks from borrowing from the Bank of Canada.

Question

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This statement is true. The bank rate is the rate at which the Bank of Canada lends money to the commercial banks. It is set higher than the overnight rate, which is the rate at which banks lend money to each other, to discourage banks from borrowing from the central bank and promote more lending between the commercial banks. When banks borrow from the central bank, it can signal a lack of confidence in their ability to borrow from other banks or access other sources of funding, which can have negative implications on the stability of the banking system.

In General,the Bank Rate Is Set Above the Overnight Rate