Overnight Rate

The interest rate for the shortest-term loans between banks, lent and repaid the next day.

The overnight rate is the interest rate charged on loans between banks that are lent one day and repaid the next, often used to help banks meet reserve requirements at the close of business. Central banks frequently target a specific overnight rate as their main tool for implementing monetary policy.

The central bank nudged its target overnight rate higher, a signal that flowed through to borrowing costs across the economy.