Overnight Rate
The interest rate at which a depository institution lends immediately available funds (balances within the central bank) to another depository institution overnight. Investopedia Says:
In countries where central banks exist, this provides for an efficient method whereby banks can access short-term financing from central bank depositories. As the overnight rate is influenced by the central bank, it is a good predictor for the movement of short-term interest rates.
In the U.S., this is referred to as the Federal Funds Rate. Related Terms:
Bank Rate
Central Bank
Federal Funds Rate
Interbank Rate
Interest Rate
Monetary Policy
Sterling Overnight Interbank Average Rate - SONIA |