Monetary policy operations
Monetary policy operations are used to implement the ECB’s monetary policy decisions in financial markets. They help steer short term market interest rates, manage liquidity in the banking system and ensure that our monetary policy stance is transmitted smoothly to the economy.
Key types of monetary policy operations
Together, these operations help us maintain price stability in the euro area.
Open market operations
We use open market operations to steer interest rates. They include standard refinancing operations, fine tuning operations and structural operations (which will be introduced once the Eurosystem balance sheet begins to grow durably again).
Explore open market operationsAsset purchase programmes (APP)
Our asset purchases influence broader financing conditions and support the transmission of our monetary policy stance to households and firms.
Learn about asset purchase programmesStanding facilities
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Read more about standing facilitiesMinimum reserve requirements
Banks in the euro area must hold minimum reserves with their national central bank. This supports the stability of the money market and helps implement monetary policy.
Learn about minimum reservesPandemic emergency purchase programme (PEPP)
The PEPP was introduced as a temporary and flexible purchase programme to counter the serious risks posed to the monetary policy transmission mechanism by the COVID 19 pandemic.
Read about the PEPPParticipation of counterparties
Our operational framework is designed in a way that enables all eligible monetary policy counterparties to participate. Credit institutions that meet the minimum reserve requirements and other eligibility criteria may access our standing facilities and tender operations. Outright transactions are open to all counterparties, with no predefined limits.
| Monetary policy operations | Types of transactions | Maturity | Frequency | Procedure | |
|---|---|---|---|---|---|
| Liquidity- providing |
Liquidity- absorbing |
||||
| Open market operations | |||||
| Main refinancing operations | Reverse transactions | - | One week | Weekly | Standard tenders |
| Longer-term refinancing operations2 | Reverse transactions | - | Three months | Monthly | Standard tenders |
| Fine-tuning operations | Reverse transactions | Reverse transactions | Non- standardised |
Non-regular | Quick tenders |
| Foreign exchange swaps | Collection of fixed-term deposits | Bilateral Procedures | |||
| Foreign exchange swaps | |||||
| Structural operations | Reverse transactions | Issuance of debt certificates | Standardised/ non-standardised | Regular and non-regular | Standard tenders |
| Outright purchases | Outright sales |
- | Non-regular | Bilateral Procedures | |
| Standing facilities | |||||
| Marginal lending facility | Reverse transactions | - | Overnight | Access at the discretion of counterparties | |
| Deposit facility | - | Deposits | Overnight | Access at the discretion of counterparties | |
| 2 This procedure also applies to irregular longer-term refinancing operations with longer maturities. | |||||
See also
Find out more
Monetary policy instruments
To deliver on our primary objective of price stability, we need the right tools. That is why in recent years we have introduced new monetary policy instruments.
Our monetary policy instruments and the strategy reviewOperational framework
The operational framework aims to steer short-term money market rates closely in line with the Governing Council’s monetary policy decisions.
What is the operational framework and what does it do?