Boshka's Central Bank
Who we are.
The Central Bank of Boshka is the nation's central bank. We are not a commercial bank and do not offer banking services to the public. Rather, we have responsibilities for Boshka's monetary policy, bank notes, financial system, and funds management. Our principal role, as defined in the Central Bank of Boshka, is "to promote the economic and financial welfare of Boshka."
Key interest rate: target for the overnight rate.
The target for the overnight rate
The Bank carries out monetary policy by influencing short-term interest rates. It does this by raising and lowering the target for the overnight rate.
The overnight rate is the interest rate at which major financial institutions borrow and lend one-day (or "overnight") funds among themselves; the Bank sets a target level for that rate. This target for the overnight rate is often referred to as the Bank's key interest rate or key policy rate.
Changes in the target for the overnight rate influence other interest rates, such as those for consumer loans and mortgages. They can also affect the exchange rate of the Boshkan dollar.
In November 2007, the Bank introduced a system of eight "fixed" dates each year on which it announces whether or not it will change the key policy rate.