Key rates & policy
Policy interest rates compared
Fed, BoE, ECB, RBA, BoJ and RBNZ policy rates are defined differently. Why their levels cannot be ranked naively, and what a cross-country read is actually good for.
It is tempting to line up the world's policy interest rates and read the list as a ranking of who is tight and who is loose. The exercise is misleading, because the entries are not the same instrument. A target range, a single policy rate, a deposit facility rate and a repo rate are different contracts between different counterparties on different collateral. This note explains the main definitions and what a cross-country comparison can honestly be used for.
Definitions differ
The United States Federal Reserve sets a target range for the federal funds rate, the rate at which banks lend reserves to each other overnight; the effective rate that clears in that market is a separate published number, at 3.63% on 10 September 2026 in the republished file. The Bank of England's Bank Rate is a single rate, 3.75% on the same date, paid on reserves held at the Bank. The European Central Bank's headline signal is the deposit facility rate, the rate banks earn on overnight deposits with the ECB, at 2.25%; the ECB also sets a main refinancing rate and a marginal lending rate, so quoting one number requires saying which.
Other central banks use yet other instruments. The Reserve Bank of Australia's cash rate target was 4.35%, the Reserve Bank of New Zealand's Official Cash Rate was 2.50% at its 25 August 2026 decision, the Bank of Japan's policy rate was 1.0%, the Bank of Korea's base rate 3.0%, the Swiss National Bank's policy rate 0.0%, the Reserve Bank of India's repo rate 5.25% and the Bank of Canada's target for the overnight rate 2.25%. Each is the rate that matters most in its own framework, and each framework defines it differently.
Why the levels cannot be naively ranked
Because the instruments differ, a simple level comparison can mislead in both directions. A deposit facility rate is not paid on the same balances as a repo rate or a policy target, so a lower number does not necessarily mean looser conditions. Countries also differ in how much of the financial system prices directly off the policy rate: in some economies the transmission is fast and broad, in others it is slower, which changes what a given level implies.
Timing compounds the problem. The observations fall on different dates, and a rate that looks tight on a stale date may already have been cut. The republished file records each central bank's latest published decision, which is the right basis for describing what each authority has said, but not a synchronised snapshot of global conditions.
Definitions also change over time. Central banks have altered their operating frameworks, added facilities and revised how the policy stance is expressed, so a long history is a history of shifting definitions as much as shifting policy.
What a cross-country read is useful for
Direction of travel is the honest comparison: is this central bank raising, holding or cutting, and how does that direction compare with others? That question is asked of each series on its own terms, and the answer is comparable even when the levels are not. It also supports a second useful reading: the pace of change relative to each economy's own start point, which is a within-series comparison rather than a cross-series one.
A level comparison can still be informative as context, provided the reader names the instrument and the date and resists treating the list as a tightness ranking. The chart above shows each bar labelled with the authority and the instrument, which is the minimum required to read it responsibly.
Where this fits in the wider picture
Global interest rates are correlated, because capital moves across borders and large central banks influence financial conditions everywhere. That correlation makes the comparison seductive: if rates broadly rose and fell together through a cycle, it is easy to treat the level differences as amounts of policy. The definitions say otherwise. Each number describes a specific tool in a specific financial system, and the systems are not identical.
The practical consequence is that cross-country rate watching should focus on direction and on each authority's own communication, not on a ladder of levels. A country with a lower headline rate may not have looser financial conditions if its instrument sits further from the rates that households and firms actually pay. The comparison is a starting point for asking better questions, not an answer in itself. The most reliable cross-country statement is usually about direction, and the least reliable is a ranking of levels.
How to read this on Younivi
The Cash Rate desk publishes US Fed funds, the NZ OCR and the UK Bank Rate on their own pages, each with the definition and source citation, plus further policy rates for other economies. Companion notes cover the OCR and floating mortgage pricing. Figures are republished official data, may lag the producer, and are not financial advice.