Strategic Open Market Operations (SOMO): A Framework for Sustainable Growth and Employment

This white paper introduces Strategic Open Market Operations (SOMO), a policy framework for central banks to channel monetary liquidity into infrastructure and green bond markets in a rulebased manner. Unlike traditional open market operations aimed solely at interest rate stabilization, SOMO integrates macroeconomic targets for GDP growth, employment, and inflation, thereby directly supporting real-sector productivity. The framework aligns monetary policy with sustainable development goals, incorporating safeguards to preserve central bank independence and credibility. The paper outlines the theoretical foundation, operational design, macroeconomic transmission mechanisms, institutional safeguards, and global applicability, drawing on empirical evidence and policy precedents. Strategic Open Market Operations (SOMO) is a rules-based monetary framework that directs central bank liquidity toward infrastructure and green bond markets to support sustainable growth, employment, and price stability. Unlike traditional QE, SOMO targets productive investments with measurable real-sector returns. The paper outlines the theoretical basis, operational design, macroeconomic channels, safeguards, global applicability, and multiple real-world implementation scenarios.