Corridor system used by most central banks to set rates

But methods vary widely depending on policy target and tools such as quantitative easing

Most central banks use a corridor system to ensure their policy rate holds in markets, but there is still a wide range of different approaches.

A corridor system sets bounds around the policy rate, with a deposit facility forming the floor of the corridor and a lending rate the ceiling. By varying liquidity in the system, the central bank can aim to keep actual rates close to the policy rate. The corridor ensures sudden changes in liquidity conditions do not lead to large swings in market rates

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.centralbanking.com/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Central Banking? View our subscription options

If you already have an account, please sign in here.

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: