Monetary policy

Interest rates

The principal way to influence price stability is for the ECB to raise or lower interest rates – interest rates on short-term rates, that is, which central banks provide to commercial banks. To control interest rates, the ECB employs a two-pronged strategy.

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Information for counterparties

This page offers DNB’s counterparties information on the implementation of the monetary policy transactions of the Eurosystem.

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Reverse auctions under the purchase programmes

DNB conducts reverse auctions for some of its outright purchases of public sector debt.

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Monetary policy instruments

The Eurosystem uses three monetary policy instruments to influence the liquidity position of the banking sector. In normal times, these instruments help maintain price stability by steering the short-term money market rate to the key policy rate determined by the ECB.

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QE & securities lending

In 2014 the Eurosystem initiated an asset purchase programma (APP) as part of its unconventional monetary policy toolkipt. Under the APP, the Eurosystem purchases debt securities issued by public sector entities (PSPP), covered bonds issued by banks (CBPP3), investment grade corporate bonds (CSPP) and asset back securities (ABSPP). In 2020 the existing purchase programmes have been complemented by the addition of the Pandemic Emergency Purchase Programme. The majority of purchases conducted for the APP and PEPP in the Netherlands is executed by DNB. DNB is making the holdings of securities purchased under the public sector purchase programme (PSPP and PEPP) available for securities lending

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