The Central Bank observes that these measures have yielded positive outcomes by way of reactivating the domestic money market and curtailing excessive competition for deposit mobilisation among financial institutions. These measures were also instrumental in inducing a moderation in the market interest rate structure in line with the monetary policy stance, while preserving stability of financial institutions and the financial system.

After carefully reviewing the developments in the domestic money market, as well as the behaviour of LCBs in terms of market participation along with the improvements in liquidity, the Monetary Policy Board, at its meeting held on 07 February 2024, decided to relax the restrictions imposed on the Standing Facilities to LCBs under OMOs. Accordingly, with effect from the reserve maintenance period commencing 16 February 2024, the restriction on the SLF will be removed and the restriction on SDF will be relaxed from five times (05) to ten times (10) during a calendar month.

The relaxation of the restrictions on the Standing Facilities is expected to accelerate the downward adjustments in market interest rates as envisaged under the overall monetary policy direction of the Central Bank.