This Market Operations 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. This has changed from OCR less 50 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 Domestic markets page.
On 12 August, the Monetary Policy Committee increased the LSAP programme size to a maximum of $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.
The reduction in the Bond Lending Facility margin reflects the Bank’s increased participation in this market and we recognise our role in ensuring market stability.
Monetary Policy Statement - August 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]