Asymmetric Standing Facilities: An Unexploited Monetary Policy Tool
36 Pages Posted: 10 Mar 2010
Date Written: March 8, 2010
This paper analyzes the role of standing facilities in the determination of the demand for reserves in the overnight money market. In particular, we study how the asymmetric nature of the deposit and lending facilities could be used as a powerful policy tool for the simultaneous control of prices and quantities in the market for daily funds.
Keywords: Monetary policy implementation, standing facilities, overnight interest rates, fine tuning operations
JEL Classification: E52, E58, E43
Suggested Citation: Suggested Citation