The overnight rate is the rate:

Question

Quizplus · Accepted Answer

The overnight rate is the rate at which one bank would lend funds (reserves) to another bank for a short period of time. This allows banks to meet their reserve requirements and manage their liquidity. The Bank of Canada sets a target for the overnight rate, which influences the interest rates that banks charge to borrowers. Option A is the prime rate, which is the rate at which private borrowers would pay a bank for a loan. Option C describes the Bank of Canada's borrowing rate, not the overnight rate. Option D refers to the government borrowing from the Bank of Canada, which is not related to the overnight rate.

The Overnight Rate Is the Rate