What is upper and lower band of overnight rate?

The upper and lower bands of the overnight rate refer to the range within which a central bank sets its benchmark interest rate for overnight loans between financial institutions. The upper band is typically the rate at which banks can borrow from the central bank, while the lower band is the rate at which banks can deposit excess reserves with the central bank. This range helps to influence short-term interest rates and maintain monetary policy objectives. The central bank adjusts these bands to manage liquidity and control inflation.