Standing facilities
Standing facilities provide and absorb overnight liquidity, signal the general monetary policy stance, and bind overnight market interest rates. There are two standing facilities which credit institutions can use at their own initiative.
- The marginal lending facility is available to credit institutions to obtain overnight liquidity against collateral. The interest rate on the marginal lending facility normally provides a ceiling for the overnight market interest rate.
- The deposit facility is available to credit institutions to make overnight deposits. The interest rate on the deposit facility normally provides a floor for the overnight market interest rate.