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Q. Define market for overnight loans?
The market for overnight loans
Overnight interest rates are rates for loans over a single night - these are the shortest of all interest rates. During the day, banks generally have access to interest free loans from central bank. At the end of the day, all such loans should be cleared with the central bank. For this concern, there is a market for loans overnight between banks and overnight interest rate is determined by demand and supply in this market.
Equilibrium in Money Markets Having dealt with the forces that determine the supply of money and demand for money, let us combine supply of and demand for money to determine eq
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what is the basis of fixation
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