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Reserve Bank Financial Markets Statement - 12 November 2020

This Financial Markets Statement confirms the pricing of the Reserve Bank’s standing facilities and ESAS accounts, and the details of the Large Scale Asset Purchase (LSAP) Programme.

Pricing is as follows:

  • ESAS balances – cash that ESAS account holders have on deposit at the Reserve Bank in their ESAS accounts will be remunerated at the Official Cash Rate (OCR).
  • Bond Lending Facility – bonds lent through the Bond Lending Facility will be lent at the OCR less 25 basis points.
  • Overnight Reverse Repo Facility – cash will be lent via the Overnight Reverse Repo Facility at the Overnight Reverse Repo Rate which is OCR plus 25 basis points.

Full details of the Bank's liquidity facilities including applicable haircuts for eligible securities, eligibility criteria and operational guidelines are available on the the Bank's website.

On 11 November, the Monetary Policy Committee announced additional monetary stimulus through a Funding for Lending Programme (FLP), commencing in December. The FLP involves the Reserve Bank providing eligible financial sector entities with long-term funding at a low cost, secured against high-quality collateral. Details of operations, including terms and conditions, will be made available in coming weeks.

The Monetary Policy Committee also agreed to continue with the LSAP programme up to $100 billion. The LSAP programme includes NZ Government Bonds, Local Government Funding Agency Bonds and NZ Government Inflation-Indexed Bonds.

The programme size includes all bonds purchased to date under the LSAP programme. Within this programme size, the Reserve Bank reserves the right to alter the composition and pace of purchases at its discretion, to achieve the objectives of keeping interest rates low and to support market functioning.

For more information read the November Monetary Policy Review.

Monetary Policy Review - November 2020

For further information contact:

Vanessa Rayner
Head of Financial Markets
[email protected]

Dean Hill
Senior Manager, Financial Markets
[email protected]

Media contact:

Patrick O’Meara
Senior Adviser External Stakeholders
Email: Patrick.O’[email protected]