The operating band is
A)the interest rate that is established through an open market operation.
B)the target overnight interest rate plus or minus 25 basis points.
C)the target inflation rate plus or minus a quarter of a percentage point.
D)a half percentage point range in the target inflation rate.
E)the range between the lending rate and the borrowing rate.

Question

Quizplus · Accepted Answer

The operating band is the range within which the central bank allows short-term interest rates to fluctuate, usually defined as the target overnight interest rate plus or minus a few basis points. This allows the central bank to maintain control over the money supply and economic activity.

The Operating Band Is