NBM operations in the money market

NBM operations on the interbank market

Standing facilities

Required reserves
 

Money market operations are operations carried out in the financial market at the NBM initiative with the voluntary participation of licensed banks.
Open market operations may be conducted through previously announced tenders (auctions), or direct negotiations. By using open market operations, NBM supplies liquidity to the market, through REPO operations, and by purchasing assets (securities or foreign currency), or absorbs resources out of the market, issuing own certificates (NBC), carrying out reverse REPO operations, selling assets (securities or foreign currency), and accepting term deposits.

Interbank market operations are the foreign exchange interventions conducted in strict correspondence with the foreign exchange policy objectives. The National Bank of Moldova uses as foreign exchange intervention tools direct operations (spot purchases or sales of foreign currency against Moldovan Lei) and fine-tuning operations (foreign exchange swaps), which are reversible instruments and does not impact the monetary aggregates over a long term.

Standing facilities represent the facilities offered by NBM to licensed banks upon their request. NBM offers the overnight credit facility and the overnight deposit facility. Standing facilities play the role of a safety mechanism in the money market liquidity management: the overnight credit facility offers to banks the possibility to take credits from NBM, while the overnight deposit facility creates the possibility to place their excess liquidity.

Required reserves represent the minimum level of attracted means that a licensed bank is requested to maintain with NBM. In order to evaluate the realization of this requirement, the average value of daily balances of the reserve account for a certain period of time is used.