Upon completion of this program, participants will be able to:

• Explain the structure and operation of the **Interest Rate Corridor System** and its components.
• Analyze the role of reserve balances and reserve requirements in interest rate control.
• Describe the mechanics and objectives of central bank **Open Market Operations (OMOs)** (repos, outright purchases).
• Utilize standing facilities (lending/deposit) to cap and floor short-term market rates.
• Evaluate the operational challenges of policy implementation in reserve scarcity vs. reserve abundance regimes.
• Understand the technical implications of balance sheet size (e.g., QE) on interest rate control.
• Assess the legal and operational framework for counterparty eligibility and collateral management.
• Formulate a technical strategy for managing market expectations through precise operational signals.

• Central Bank Market Operations and Money Market Analysts
• Commercial Bank Treasury and Liquidity Management Staff
• Fixed Income Traders and Money Market Dealers
• Academics and Researchers specializing in Monetary Policy Implementation
• Financial Market Infrastructure (FMI) Operations Managers
• Compliance and Audit Professionals for Trading Operations

Money market trading desk simulation, Case studies on central bank policy implementation challenges, Technical workshops on collateral and haircut calculations, Group exercises on liquidity forecasting, Discussions on policy rate corridor design, Analysis of OMO tender results.

Unit 1: The Interest Rate Control Framework

• Defining the policy rate and the target operating band (corridor).
• The function of the deposit facility (floor) and the marginal lending facility (ceiling).
• How arbitrage opportunities keep the market rate within the corridor.
• Impact of liquidity forecasting errors on the market rate.

• The demand and supply for central bank reserves and the "reserve demand curve."
• The impact of reserve requirements and averaging periods on bank behavior.
• The concept of the **"liquidity benchmark"** or autonomous liquidity factors.
• Challenges in policy implementation during periods of structural liquidity surplus.

Unit 2: Open Market Operations (OMOs)

• Mechanics of repurchase agreements (repos) and reverse repos in short-term liquidity management.
• Execution techniques: tenders (variable/fixed rate) and bilateral operations.
• The use of central bank bills and foreign exchange swaps as OMO instruments.
• Managing the timing and volume of operations to steer the policy rate.

• The role of outright purchases and sales of government securities in structural liquidity provision.
• Operational procedures for executing outright transactions in secondary markets.
• The use of outright operations in the context of Quantitative Easing (QE).
• Impact of outright purchases on the central bank's balance sheet and asset duration.

Unit 3: Operational and Technical Challenges

• Eligibility criteria for collateral used in central bank operations.
• Valuation, haircuts, and risk management of the collateral pool.
• Governance for counterparty eligibility and risk limits.
• The use of automated trading systems and execution protocols.

• Operational challenges in moving from a **scarcity** to an **abundant** reserve regime (and vice-versa).
• The role of Interest on Reserves (IOR) and the Interest on Excess Reserves (IOER) in policy control.
• Managing market fragmentation and differential pricing within the interbank market.
• Future considerations: impact of CBDC on the reserve management framework.

Unit 4: Market Signals and Communication

• How market participants interpret the size, frequency, and type of central bank operations.
• Using operational tools (e.g., fine-tuning operations) to signal policy intentions.
• The importance of clear communication regarding the central bank's liquidity forecast.
• Techniques for analyzing money market activity (e.g., trading volumes, rate dispersion).