In order to sterilize excess money supply caused by growth in international reserves, the Central Bank uses a range of instruments; specifically, it attracts deposits from commercial banks and issues its own bonds.
As a result, a sharp widening of spreads, rating downgrades of Greek debt, and stresses in the Greek banking system followed. By mid-April, it was clear that Greek financial institutions and the Greek government were rapidly losing access to market financing, just as sizable redemptions on the government’s debt were looming.