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For the management of short term liquidity by the banks, namely overnight, the Central Bank has in place two types of standing facilities. These are the;
- Standing Credit Facility (SCF, introduced in June 2009) which is an overnight collateralised loan facility that provides funds to the commercial banks at a predetermined interest rate, so as to cover temporary end-of-day shortfalls that can arise in the daily settlement of payments. Collateral requirements are outlined in by the ' Determining Collateral Haircuts & Market Value ' document.
- Standing Deposit Facility (SDF, introduced in December 2009) which is an overnight deposit made with the Central Bank at a pre-established interest rate, for the banks to place any overnight excess reserves
The interest rates on these facilities are set by the Bank in such a way that an interest rate corridor for market rates may be established and to encourage interbank transactions.
Effective August 01, 2014 the rates on the Standing Facilities stand at:
- 0.25% for the Standing Deposit Facility; and
- 1.75% for the Standing Credit Facility.