Official Bank Rate



On 18 May 2006 the Bank introduced some wide ranging reforms to the framework for its operations in the sterling money markets. Theses reforms included: 



The introduction of reserve accounts, held by commercial banks at the Bank, on which the official Bank rate is paid. The reserves scheme is voluntary and members undertake to hold a particular target balance not every day but on average over a monthly “maintenance period”. 



Standing facilities which allow a wide range of banks to borrow (against collateral) or deposit money with the Bank at rates which on most days are 1% above and 1% below the official Bank rate, but 25 basis points (¼%) above or below on the last day of each maintenance period.