The Bank’s monetary policy framework has as its primary objectives, the maintenance of:
- A low and stable rate of inflation;
- An orderly foreign exchange market; and
- An adequate level of foreign exchange reserves.
The Bank employs a range of both direct and indirect instruments to effect monetary policy. The indirect or market based instruments largely comprise open market operations and the use of a policy interest rate – the ‘Repo’ rate, while the direct instruments mainly involve use of the statutory reserve requirement. The Bank may also establish special facilities in order to add liquidity or to absorb excess liquidity from the financial system.