The Governing Council of the European Central Bank (ECB) has decided to establish a new financial instrument EUREP (Eurosystem repo facility for central banks), which will enable Montenegro to apply for funds to support systemic liquidity1. This expands the possibilities of the CBCG to provide additional funds to support systemic liquidity in the event of market disruptions caused by the shock resulting from the new Coronavirus pandemic.
This was preceded by the participation of the CBCG in the regional initiative towards the ECB, which sought to provide liquidity support for countries that are not part of the Eurosystem. In the next phase, the CBCG addressed the President of the ECB Christine Lagarde and the members of the ECB Executive Council directly with a request to consider the possibility of establishing a mechanism that would enable the CBCG to “temporarily access Euro liquidity”. This letter contains a detailed description of the need to provide additional liquidity buffers, all aimed at more comfortable coping with increased uncertainty and the accompanying adverse consequences of the new Coronavirus pandemic.