Standing facilities aim to provide and absorb overnight liquidity, signal the general monetary policy stance and constrain overnight market interest rates. Two standing facilities, which are administered in a decentralised manner by the NCBs, are available to eligible counterparties on their own initiative.
1. Marginal lending facility
Counterparties can use the marginal lending facility to obtain overnight liquidity from the NCBs against eligible assets. The interest rate on the marginal lending facility usually provides a ceiling for the overnight market interest rate.
2. Deposit facility
Counterparties can use the deposit facility to make overnight deposits with the NCBs. The interest rate on the deposit facility usually provides a floor for the overnight market interest rate.