
The
standing facility of
buying/selling foreign currency (forex window) and the
reserve requirement for banks are Eesti Pank's
main instruments of monetary policy.

The forex window was created to provide sufficient
liquidity of the kroon to banks.

The reserve requirement for banks was established to
regulate the liquidity reserves of the financial system.

The currency board framework gives a more substantial
weight to Estonia's reserve instrument. To some degree, it helps compensate for the lack or limited nature of other instruments.