Central bank overnight interest rate, Macroeconomics

Assignment Help:

Q. Central bank overnight interest rate?

Overnight interest rate is a significant interest rate for a central bank and it has methods of influencing this rate. In most nations, central bank signals what it would like the overnight rate to be. For illustration, in U.S., this rate is the federal funds rate. If overnight rate steers away from the federal funds rate, Federal Reserve will take action to steer it back towards federal funds rate.

In addition to signalling a desired overnight interest rate, most central banks have 'standing facilities' for overnight loans. For instance, ECB has a 'deposit facility' and a 'marginal lending facility' that member banks can use for deposits and for lending overnight. Overnight interest rate should consequently be in between the deposit rate and marginal lending rate. Characteristically overnight rate is far from the deposit and lending rates and standing facilities are rarely used.


Related Discussions:- Central bank overnight interest rate

Introduction of Macroeconomics, Macroeconomics We have explained severa...

Macroeconomics We have explained several concepts and Macroeconomic Aggregates which form the basic terminology of macroeconomic analysis. Like other empirical sciences, econom

Meaning of convex indifference curves, Explain what convex indifference cur...

Explain what convex indifference curves means in terms of marginal utility. What properties must a utility function have in order to obtain convex indifference curves?

Financial crisis in terms of adverse, Briefly explain the dynamics of the 2...

Briefly explain the dynamics of the 2007 financial crisis in terms of adverse selection and moral hazard.

Determine the dimensions of antenna , Design a rectangular patch antenna (s...

Design a rectangular patch antenna (substrate: εr = 3, tan-δ=0, h = 0.75 mm) operating at f0 = 2.5 GHz a) Determine the dimensions W and L of the antenna, assume w/λo b) The

Bank of canada announces that it will raise the money supply, Suppose the B...

Suppose the Bank of Canada announces that it will raise the money supply in the future but does not change the money supply today. Using the Fisher equation, explain what happens t

Determine the degrees of freedom, A biologist working in the Outback of Aus...

A biologist working in the Outback of Australia is studying the effects of land-use by tourists (campers, fishers, etc.) on vegetation cover in a river gorge of the outback. There

Basic concepts and terminology, when domestic currency becomes more valuabl...

when domestic currency becomes more valuable in terms of foreign currency, the domestic currency is said to have

Majority of the citizenry pays, Can democracy survive if a majority of the ...

Can democracy survive if a majority of the citizenry pays little or nothing in taxes while benefiting directly from a higher level of government spending? Why or why not?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd