The main refinancing operation is the central instrument by which the European Central Bank will control the provision of euros to the banking system once it takes over control of monetary policy for the euro on January 1, 1999.

In a report on its monetary policy instruments, which builds on a similar report issued last year, the central bank produced a calendar for these refinancing operations and also for a second series of longer-term refinancing operations.

The main operations will have a two-week duration, the longer-term ones a duration of three months or more. Operations will be carried out through the European System of Central Banks (ESCB) which groupsthe euro national central banks.

"The first main refinancing operation in stage three is announced on 4 January, 1999, the tender allotment takes place on January 5, 1999, and the related transactions are settled on January 7, 1999," the European Central Bank said.

In this particular case, the operation will have a maturity of 13 days, the central bank said. Transactions of this type will usually have a 14-day maturity.

Generally, such operations will be set each Monday, with the allotment being announced on Tuesdays and the allocation on Wednesday, the central bank said.

January 6, the Wednesday after the first operation is set, is a holiday in some European Union countries.

The first longer-term refinancing operation in stage three will be announced on January 12, the ECB said. The allotment will take place on January 13 and transactions settled on January 14.

"This first longer-term refinancing operation consists of separate tenders for transactions with three different maturities," theEuropean Central Bank said.

Approximately one-third of the volume would have a 42-day maturity, with reimbursement taking place on February 25. A further third has a maturity of 70 days, with reimbursement due on March 25, 1999. The final third has a maturity of 105 days, with reimbursement due on April 29, 1999.

The ECB added that additional fine-tuning and structural market operations could be conducted from January 4, 1999.

Similar open market operations set by national central banks before the transfer of monetary policy control to the ECB would remain current until they expired, with the national central banks continuing to take responsibility for them until they matured, the ECB said.