The primary objective of the ECBs monetary policy is to maintain price stability. The ECB aims at inflation rates of below, but close to, 2% over the medium term.The operational framework of the Eurosystem consists of the following set of instruments:
Open market operations
Open market operations play an important role in steering interest rates, managing the liquidity situation in the market and signalling the monetary policy stance.
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Standing facilities
Standing facilities aim to provide and absorb overnight liquidity, signal the general monetary policy stance and bound overnight market interest rates. Two standing facilities, which are administered in a decentralised manner by the NCBs, are available to eligible counterparties on their own initiative.
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Minimum reserve requirements
The intent of the minimum reserve system is to pursue the aims of stabilising money market interest rates, creating (or enlarging) a structural liquidity shortage and possibly contributing to the control of monetary expansion.
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