The conversation between human and AI assistant.
Why is bank rate a discounted rate?
Can banks borrow unlimited money from the central bank at the bank rate?
No, banks can't borrow unlimited money from the central bank at the bank rate. Each central bank sets a limit on the amount of funds that can be borrowed at the bank rate, and commercial banks have to apply for these funds. Additionally, the central bank can adjust the bank rate to control the supply of money in the economy.