In early December 2013, the Central Bank’s liquidity management framework was enhanced with an increase in the borrowing limits under the Treasury Bills Act (to $ billion from $ billion) and the Treasury Notes Act (to $ billion from $ billion). I wish to emphasize that these Treasury securities are purely for the purposes of monetary policy, not fiscal policy.
The proceeds of the securities are locked away in a blocked account at the Central Bank and only re-enter the financial system upon maturity of the existing securities. These funds are not used to finance the government’s budget or any government program. I also wish to emphasize that this practice is not new.