NBM to Run Operations to Inject Liquidity in Banking System
OREANDA-NEWS. September 16, 2013. This is stipulated by a schedule for monetary policy operations in 2015 the National Bank of Moldova has published.
The publication of the document fits in with NBM’s practice to make preliminary announcements about a program and terms of open market operations in line with its mid-term monetary policy. The open market operations will be the principal instrument of the monetary policy of the bank used in the short-term prospect to balance supply and demand on the monetary market, the press release of NBM reads.
This will make it possible for NBM to directly influence short-term interest rates on the interbank market. Taking into consideration the lasting deficit of demand on the internal market and its slow evolution that keeps influencing the pace of growth of the national economy, NBM is going to proceed with injecting liquidity to the banking system of Moldova in 2015 too.
The banking system is going to be injected through REPO operation at a fixed rate for 28 days, when the National Bank will buy state treasury bonds from banks for them to buy them back in a certain period of time and at a price fixed as of the moment of the purchase. The REPO operations will be run through auctions every week.
As before, the schedule of monetary policy operations for 2015 includes placement of NBM certificates for 14 days. The certificates are to be placed twice a week provided that the excessive liquidity keeps on the market. The National Bank states it will continue following principles of transparency and regularity in performing its operations at auctions and ensuring uninterrupted absorption and assignment of liquidity in order to facilitate liquidity management in banks.
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