Financial institutions’ current account balances at the Bank of Thailand (banks' reserves) are one of the components of reserve requirements which financial institutions are required to maintain on average over a fortnightly period (starting on a Wednesday and ending on a second Tuesday thereafter) with carry-over provisions using the previous period's average level of commercial banks' deposits/liabilities as the base. This carry-over provision allows banks to carry forward/backward their deposits at the BOT by up to 5% (of the requirements).

          In maintaining the policy rate, the BOT adjusts liquidity in the system mostly through conducting open market operations (OMOs). In doing so, the BOT undertakes transactions in financial markets in order to affect the aggregate level of reserves balances, so that there is sufficient liquidity in the banking system to meet banks' demand for reserves and settlement balances. This will, in turn, ensure that the short-term money market interest rates move in line with the policy rate.

Note: Currently, the reserve requirements ratio is 6% and the reserveable assets consist of a minimum 1% in non-remunerated current account balances at the BOT, (of which no more than 0.2% in cash at the central cash centers of commercial banks can be counted towards this component), a maximum 2.5% in vault cash and the rest in eligible public securities.