The Central Bank standing facilities are instruments designed to address temporary reserve deficits on the interbank market or inject surplus reserves into the market. Transactions are initiated upon the request of banks at pre-determined rates. The BOM’s standing facilities include intraday loan, overnight repo financing and overnight deposit. Interest rate levels of overnight repo and overnight deposit depend on the policy rate.
| Indicators of the Standing Facilities | |||
|---|---|---|---|
| Instrument | Overnight deposit | Overnight repo financing | Intraday loan |
| Maturity | Overnight | Overnight | Withing the working day |
| Rate | Policy rate -1% | Policy rate +1% | 0% |
| Collateral | - | Eligible assets | |
| Frequency | Open daily | Open daily | Open daily |
Overnight repo financing
The BOM overnight repo financing is a loan issued to banks that do not satisfy the reserve requirement, from the closing of clearing services at banks until the opening of clearing services the following business day.
Overnight deposit
Overnight deposit is an instrument to mop up excess reserves of banks from the market at the end of day. These deals must be performed upon requests from banks and shall be the last transaction of the banks on that day.
Intraday loan
Intraday loan facility is an instrument to reduce interbank settlement risks and expedite interbank transactions. Intraday loans are repaid on the same day and used only for ensuring smooth transactions and not for monetary policy purposes. Intraday loans have no interest rate and are guaranteed by collateral assets. If the intraday loan is not repaid at the end of the day, it is converted to an overnight repo facility and the terms of the repo facility will apply.