From 16 July, seven-day Central Bank repo auctions replaced seven-day Central Bank bonds as the principal tool for absorbing excess banking-system liquidity. The shift strengthens market-based liquidity management and the short end of the domestic yield curve.
Repo-auction pricing will be based on yield-curve data, while earlier maturity and secondary-market restrictions on eligible securities have been removed. The Central Bank can also conduct fine-tuning repo auctions to smooth unexpected liquidity fluctuations.
The reform follows recommendations from the IMF, the EBRD and OG Research. By shifting the operational framework toward repo transactions, the regulator aims to manage surplus liquidity more efficiently and strengthen monetary-policy transmission.
More regular repo pricing can improve short-term reference rates and the productive use of eligible collateral. Over time, those foundations are relevant for more consistent corporate-bond pricing, bank treasury management and secondary-market liquidity.
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