Economics, Econometrics and Finance
4 years ago

Central Bank Strategy Reduces Interest Rate Volatility in Czech Republic

˜The œinternational journal of business and finance research
Open Market Operations And The Price Of Liquidity: The Case Of The Czech Republic Between 1998 And 2004
Karel Brůna

Paper Summary

Central banks need to keep overnight interest rates stable for effective monetary policy. The Czech Republic's interbank market from 1998 to 2004 showed that fluctuations in reserves demand can affect interest rate volatility. The introduction of intraday credit led to a decrease in overnight interest rate volatility.

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