The interbank overnight lending market is a market where depository institutions buy or sell funds needed to meet a reserve requirement at the end of the trading day. In this market, banks can sell their excess reserves to other banks with insufficient reserves at the overnight inter-bank lending rate. The central bank typically serves as the institutional basis of the overnight lending market. Should demand for funds exceed/fall short of expectations -- reflected also in a sharp movement in the market determined overnight lending rate -- the central bank may increase/decrease liquidity in the system. Periodically, the central bank may reduce/raise the target overnight lending rate in order to signal a change in monetary policy