The key policy instrument used in this endeavour is the establishment of policy interest rates for borrowing (Repurchase Rate) and for lending (Reverse Repurchase Rate) that operates through the Bank’s Open Market Operations. The Central Bank conducts Open Market Operations to keep the level of Reserve money in the system at an appropriate level, while it uses the Statutory Reserve Ratio (SRR) on commercial bank deposit liabilities to further support the monetary policy. Financial System Stability, the other core objective of the Central Bank, is achieved through the regulation and supervision of financial institutions, the overseeing of the financial infrastructure which includes critical payment and settlement systems, as well as keeping a close watch on the financial markets as a whole. To achieve this objective, the Central Bank employs a series of prudential and regulatory measures. In addition to the core objectives, the Central Bank provides policy advice to the Government and vital state sector enterprises to strengthen macroeconomic stability and to enhance growth prospects. The Bank also undertakes several agency and ancillary functions, which include managing the Foreign Reserves of the country, Public Debt and Employees’ Provident Fund (EPF). Further, the Central Bank plays a key role in broadening the financial infrastructure and strengthening the small, medium and microfinance sectors in the country. 2. Outline of today's statement  The policy statement presented today for the year 2007 and beyond focuses on several areas.
But there is no doubt that the unique, intra-European exchange rate certainty that would be provided by a single currency could nevertheless -- through increased competition as a result of greater price transparency and lower transaction costs, and through the associated improvement in resource allocation -- greatly increase the benefits that are to be derived from the single market. So, on the positive side there is no doubt that it would -- other things equal -- be a very desirable complement to the single market. The problem is that other things may not necessarily prove to be equal. Essentially, the downside is that there is a risk that the single monetary policy -- the single short-term interest rate -- throughout the euro-area, which is a necessary corollary of the single currency, may not, in the event, prove to be appropriate to the domestic needs of each of the participating countries. That risk was quite clearly recognised by the drafters of the Maastricht Treaty. They quite deliberately included in the Treaty the famous convergence criteria in order to ensure that countries wanting to participate in the euro-area should have to demonstrate, before they were allowed to join, at least a minimum degree of sustainable economic convergence precisely in order to reduce the risk of divergent national monetary policy needs once the single currency is introduced. Without that, the potential problems could be serious.