Liquidity Management
The Central Bank of Armenia fulfils the price stability objective by managing the operational target, which is the short-term interest rate of the liquidity market. The CBA steers the short-term interest rate through its operations in the market by injecting or absorbing liquidity.
The process of short-term liquidity management consists of the following stages:
- Forecasting – short-term dram liquidity programming for each period of the reserve requirement regime,
- Market research – the Central Bank of Armenia maintains ongoing communication and information sharing with financial market participants as part of its liquidity management activities,
- Carrying out operations – use of indirect instruments of monetary policy by the Central Bank of Armenia,
- Monitoring – daily monitoring of the financial markets of the Republic of Armenia,
- Ensuring accountability and transparency – publishing the information on transactions concluded in the financial market, operations carried out by the Central Bank of Armenia, and short-term liquidity forecasts on the CBA’s official website.
Central bank short-term liquidity management