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BOT Liquidity Management for Monetary Policy Implementation |
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In conducting open market operations, the Bank undertakes transactions in financial markets in order to affect the aggregate level of reserves balances (financial institutions' deposits at the Bank) available in the banking system, and therefore affects the short-term market interest rates. OMOs are the most actively used instrument to maintain the policy rate, while at the same time ensuring that there is sufficient liquidity in the banking system to meet banks' demand for reserves and settlement balances.
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