Deposit Facility Implementation

Effective from 1 December 1998, the Czech National Bank is adding a so-called deposit facility to the types of bank transactions it uses for monetary policy implementation. Commercial banks will thus be able to deposit automatically their excess liquidity with the CNB at the end of the day as a deposit at the discount rate. This measure should reduce the volatility of short-term interest rates and restrict their movement to the corridor between the Lombard and discount rate. The introduction of this instrument has brought the range of monetary instruments into harmony with the instruments of the European Central Bank.

CNB - Public Relations Department