Bank of Canada Week 8

5 foreign debt grows bank of canada act to regulate

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: erous business transacIons. At the end of the day, depending on the day’s acIvity, they may end up with a surplus or a deficit. •  Banks with surpluses lend to those that have deficits. •  The Bank of Canada sets this target once a month, with a +/- difference of 0.25%. Overnight Interest Rate •  The Overnight Rate is directly Ied to the liquidity of the economy; i.e. the more money available in the economy, the lower the rate is. •  Liquidity is the access to cash or credit. •  The Overnight Rate ends up affecIng the enIre spectrum of interest rates: –  The lowered overnight rate increases the demand for credit. –  Banks give out more credit. –  The reverse is also true. Increasing Credit Levels •  The more credit av...
View Full Document

This note was uploaded on 01/26/2014 for the course LAPS ADMS 1010 taught by Professor D.jurkowski during the Winter '10 term at York University.

Ask a homework question - tutors are online