Asked by j
The
rate is the interest rate banks charge each other for borrowing or storing money.
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If you mean the rate banks charge one another for short-term loans of reserves, the clearer term is the interbank rate (or, in some countries, the federal funds rate). A concise corrected sentence:
- The interbank rate is the interest rate banks charge each other for short‑term loans of reserves, usually overnight.
Notes:
- Examples: U.S. federal funds rate, LIBOR (being phased out), SOFR, EONIA.
- It’s a short‑term lending rate, not literally a “storage” fee — central banks may pay a separate deposit rate for reserves parked with them.
Would you like a version tailored to a specific country or an explanation of how this rate affects consumer interest rates?
- The interbank rate is the interest rate banks charge each other for short‑term loans of reserves, usually overnight.
Notes:
- Examples: U.S. federal funds rate, LIBOR (being phased out), SOFR, EONIA.
- It’s a short‑term lending rate, not literally a “storage” fee — central banks may pay a separate deposit rate for reserves parked with them.
Would you like a version tailored to a specific country or an explanation of how this rate affects consumer interest rates?
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