Figure14-7Example of the Bank of Canada’s Operating Band The Bank of Canada’s declared policy is to ensure that the actual overnight rate stays within an operating band that is half a percentage point wide and centred at its target rate. The upper limit of the BOC’s operating band is the bank rate, which is one quarter of a percentage point above the target for the overnight rate. The lower limit of the BOC’s operating band for the overnight rate target is the rate of interest it pays to commercial banks on their accounts. This example shows the operating band when the target for the overnight rate is set at 1%.