Monetary operations are discretionary market operations and the main mechanism through which the Bank adjusts liquidity in the banking system by absorbing or adding liquidity via various types of instruments to achieve its operating target, the average overnight interbank rate (AOIR). The Bank’s counterparties for monetary operations comprise the approved interbank institutions in the domestic interbank market. All approved interbank participants are able to participate directly in monetary operations conducted by the Bank, including standing facilities. However, participation in Bank Negara Monetary Notes (BNMNs) auctions is only via appointed Principle Dealers (PDs).
Monetary operations with all interbank participants are conducted daily through electronic auctions on the web-based Fully Automated System for Issuing/Tendering (FAST). The auctions can be undertaken in various forms: competitive variable rates, competitive single rate or non-competitive forms. All auction invitations and auction results are published on the FAST website (https://fast.bnm.gov.my). The Bank may also conduct bilateral operations with financial institutions or intervene through agent banks or via money brokers.