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April 2003 - January 2008. Operational target for daily balances (known as the "corto")

The target for daily balances was used from April 10, 2003 to January 20, 2008. The daily balances targeted were the balances in the accounts held by banks at Banco de México. Implementing a neutral monetary policy implies that the central bank provides all the liquidity needed to keep the average daily balance of the banks' accounts at the central bank in zero at the day end. Signaling a restrictive posture implies that the central bank also provides all the liquidity needed by the system but a part of the funds, the amount of the “corto” (negative balance target), is charged at higher interest rates. An expansionary posture would imply a positive target for the daily balances.

For further information about this mechanism, please refer to the following document: Banco de México's monetary policy operations via daily balances (mechanism in force from April 10, 2003 to January 20, 2008).