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RBNZ to accept NZ bank paper in repo facility - 23 August 2007

As stated on 16 August, the Reserve Bank has continued to closely monitor the impact of global market disorder on developments in the domestic financial markets.

Reserve Bank Deputy Governor, Grant Spencer, said: "Pressures have persisted over the past week warranting steps to ease liquidity conditions in the interbank market.

"As a temporary measure the Bank will now accept NZ bank bills in its overnight reverse repurchase facility, at a cost of OCR + 100 basis points.

"This change will commence from 24 August 2007."

Mr Spencer added, "At the same time the Reserve Bank will introduce its previously announced Exchange Settlement Account tiering regime which was due to be introduced from 3 September 2007."

Mr Spencer emphasised: "This measure is aimed solely at easing short-term interbank liquidity pressures and has no implications for the Bank's monetary policy stance."

Operational details of the facility can be obtained from the Reserve Bank's website.

For further operational details contact:

Te Okeroa
Manager, Market Operations
[email protected]