Real-Time Gross Settlement (RTGS) payment systems require high levels of reserve liquidity to clear wholesale financial transfers instantly throughout the operating day. A temporary shortage of reserves can cause processing delays as banks wait to receive incoming funds.
The Intraday Liquidity Injection Channel
[Bank Alpha Faces Payment Queue] ---> [Request Intraday Credit Line] ---> [Pledge Eligible Collateral Assets]
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[Repay Intraday Credit Line] <--- [Process Delayed Transfers Instantly] <----------+
To maintain payment velocity and prevent system-wide delays, central banks offer Intraday Credit Facilities. These lines provide interest-free, intraday cash to banks against eligible collateral, injecting the liquidity needed to process high transaction volumes safely during the operating day.
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