Open market operations

Open market operations play an important role in steering interest rates, managing the liquidity situation in the market and signalling the monetary policy stance, and are conducted at the initiative of the ECB.

Five types of tools, or instruments, are available to the Eurosystem when carrying out open market operations. The most important instrument is reverse transactions, which are applicable on the basis of repurchase agreements or collateralised loans. The Eurosystem may also make use of outright transactions, issuance of debt certificates, foreign exchange swaps and collection of fixed-term deposits.

There are four main types of open market operations:

Main refinancing operations

Main refinancing operations (MRO) are regular liquidity-providing reverse transactions generally with a frequency and maturity of one week. They are executed by NCBs on the basis of standard tenders, according to a pre-specified calendar. The MRO plays a pivotal role in fulfilling the aims of the Eurosystem’s open market operations. 

Longer-term refinancing operations

Longer-term refinancing operations (LTRO) are liquidity-providing reverse transactions and normally have a maturity of three months. They are executed by NCBs on the basis of standard tenders, according to a pre-specified calendar. LTROs aim to provide counterparties with additional longer-term refinancing. As a rule, the Eurosystem does not send interest rate signals to the market by means of these operations.

In recent years, the regular LTROs have been complemented by non-standard LTROs, which vary in design and duration. Currently, there are a number of Targeted Long-Term Refinancing Operations (TLTROs) outstanding. These operations provide financing to credit institutions for periods of up to four years and are designed to encourage bank lending to the non-financial private sector. For further details on TLTROs, please visit the dedicated TLTRO page on the ECB’s website.

Fine-tuning operations

Fine-tuning operations can be executed on an ad hoc basis to manage the liquidity situation in the market and to steer interest rates. In particular, they aim to smooth the effects on interest rates caused by unexpected liquidity fluctuations. Fine-tuning operations are primarily executed as reverse transactions, but may also take the form of outright transactions, foreign exchange swaps and collection of fixed-term deposits. They will normally be executed through quick tenders or bilateral procedures.

Structural operations

Structural operations can be carried out by the Eurosystem through reverse transactions, outright transactions, and the issuance of debt certificates. These operations are executed whenever the ECB wishes to adjust the structural position of the Eurosystem vis-à-vis the financial sector (on a regular or non-regular basis). Structural operations in the form of reverse transactions and the issuance of debt instruments are carried out by the Eurosystem through standard tenders. Structural operations in the form of outright transactions are normally executed through bilateral procedures.

MRO and regular LTRO rates (Effective from 16 March 2016)

MRO Rate LTRO Rate
 0.00%  0.00%