Under the ITL monetary policy framework, our operating target is the interbank interest rate, not the monetary base, and the tool we use to influence the interest rate is secondary market operations in the money market, mainly repos and reverse repos.
The primary auctions of Government Securities are now used to fund the Government’s domestic borrowing requirement and to refinance the existing stock of securities as they mature, rather than as an instrument of monetary policy. Furthermore, the Government will fund fully its domestic borrowing requirement from the market, by issuing securities, without recourse to any funding from the Central Bank.