We design all our non standard measures – the full allotment of liquidity at fixed rates, the covered bond purchase programme and the Securities Markets Programme – to be commensurate to the market disruption, in order to improve the transmission of our monetary policy.
The basic message of the ‘trilemma’ is that a central bank can achieve any two of the above-mentioned parameters, but not all the three. Illustratively, if a country wants to have fixed exchange rate and independent monetary policy then it is difficult to maintain an open capital account. Another important issue in monetary policy is the extent of transparency.