Market maker

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The Market Maker has the authority to release new ndau from the reserve and to permanently remove ndau from circulation. It is contractually obligated to take these actions as directed by BPC monetary policy.

When ndau demand rises beyond the limit of what’s available in the market below the current Target Price, the Market Maker sells new ndau into the market at that Target Price, which increments higher every 1,000 ndau sold from the reserve. The net proceeds of those sales then flow to the Endowment as discussed above. Conversely, when the ndau Market Price falls to the Floor Price, the Market Maker buys ndau through purchase orders it has placed at the Floor Price (subject to practical rates of liquidity) and permanently removes the repurchased ndau from circulation.

The Market Maker also acts as a liquidity provider for ndau and aims to maintain stability and liquidity through its ability to buy and sell currency according to the rules prescribed by the BPC. It stands ready to buy and sell ndau on a continual basis at prices specified by pre-established and transparent rules, subject to practical volume per unit time limitations.

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