As the financial system has regained stability, liquidity demand at financial institutions has declined, reducing the need for the provision of funds at a level well over required reserves. In addition, the duration effect of the policy commitment has been gradually diminishing with the shortening of the expected duration of the quantitative easing policy in line with the improvement in price developments.
Ultimately, the duration effect ceases to exist when the criterion that the year-onyear rate of change in the CPI is registering zero percent or higher on a sustainable basis is fulfilled.