Starting from 1994, the Treasury’s annual use of short-term advances is to be reduced gradually over five years from 15 to 3 percent of each year’s incremental budget appropriations. By 1998, the Treasury will be entitled to short-term advances totalling not more than 3 percent of that year’s incremental budget appropriations over the previous year. In addition to that, the Treasury and the Central Bank have signed a seven-point protocol to cooperate in fighting inflation. The official aim of this accord is also to give the Central Bank more independence. So, an important development towards the full independence of the Central Bank has been initiated, as required in the Maastricht Treaty. However, we have been in the process of preparing a new Central Bank law in parallel with the same institutions in the EU. The work has already been done and we are ready to submit it to the government if and when the political environment is appropriate. On the other hand, in addition to the already installed electronic payments clearing system, the CB has signed a contract to develop and install a modern national securities settlement system. The new system will allow the Bank to increase the efficiency with which government securities can be traded on the capital markets and ensure that the payments system will match the standards of those in the EU and other western nations. The new system will also be capable of being connected to the BIS Review 105/1997  -3TARGET network.
First, by communicating a change in outlook and the bias of monetary policy, inducing an important decline in market rates at all horizons. Then, in January 2009, with a clearer assessment of the reduced inflationary pressures, the MPR was lowered by 100 basis points. Later, with the evidence of alleviated inflationary pressures and a sharp contraction in demand, the Central Bank decided to cut the MPR by 250 basis points at both its meetings of February and March. The monetary easing process continued and completed 775 basis points in seven monthly meetings, bringing the MPR to 0.50% in July 2009, the minimum level deemed adequate for a normal functioning of money markets (figure 6). In addition, the Central Bank also announced that the MPR would be held constant at this minimum level for a prolonged period of time. In order to strengthen the commitment to this announcement, which goes beyond the regular monthly MPR setting, the Bank adopted some non-conventional monetary policy measures, extending the overnight liquidity facility for banks at the MPR to 180-day term through a term liquidity facility (Facilidad de Liquidez a Plazo, FLAP). The extraordinary liquidity measures provided during the crisis extinguished in mid 2010 and their withdrawal did not generate stress in the money market. The shift to a countercyclical policy stance was also taken forcefully on fiscal policy. In January 2009, the government announced a sizable fiscal stimulus package, amounting to $ billion for that year, equivalent to 3% of GDP.