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Beginning tomorrow, the Central Bank (CB) will implement a new Open Market Operations (OMO) with which it hopes to regulate the volume of money in the economy. The final goal of the OMO is the maintenance of economic and price stability within the nation, a CB press release said yesterday.

Depending on the monetary need, the CB will inject liquidity to the financial system by purchasing government securities, or absorbing liquidity from the system, by selling out of its holdings, government securities or CB securities.

The main features of the system are: an interest rate corridor; daily auction at a repurchase interest rate (repo) to maintain the inner bank rate stability within the corridor; standing facilities; outright buying/ selling of Treasury Bills/bonds at the discretion of the CB to either inject or absorb long-term liquidity. Beginning tomorrow, transactions under OMO will be conducted at rates of interest determined in the market, aimed at market based instruments of monetary policy, the press release disclosed.

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