The Role of CBSI in the Secondary Market for Goverment Bonds

In September 2020, the Central Bank of Solomon Islands (CBSI) announced an accommodative (expansionary) monetary policy stance. The two most common tools available to CBSI are the open market operations (OMO) and the cash reserve ratio (CRR). A non-traditional monetary policy instrument which has become useful and utilized by most central banks during the 2009 global financial crisis and the current economic fallout caused by the Coronavirus-2019 (COVID19) pandemic is known as quantitative easing i.e. purchasing of government bonds and other financial instruments (assets) by the central bank in the open (secondary) market.