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Reserve Bank reviews margins on standing facilities and ESAS accounts - 14 November 2019

The Reserve Bank has made some changes to the pricing of its standing facilities and Exchange Settlement Account System (ESAS) accounts. These facilities support market functioning and the changes below have no implications for the stance of monetary policy.

As a result of the latest review, the following changes will be made to pricing effective immediately:

  • Bond Lending Facility – bonds lent through the Bond Lending Facility will be lent at the OCR less 75 basis points. This has changed from OCR less 100 basis points.
  • Repo Facility – a maximum rate will be set for bonds lent through the Repo Facility at the OCR less 75 basis points. This has changed from OCR less 70 basis points.
  • ESAS balances above credit tiers – cash that ESAS account holders have on deposit at the Reserve Bank in their ESAS account that is in excess of their allocated credit tier will be remunerated at OCR less 75 basis points. This has changed from OCR less 100 basis points.

All other facilities remain unchanged.

The Reserve Bank is considering a consolidation of the Bond Lending Facility and Repo Facility. Equalising the margins on these facilities is seen as the first step in this process. The Reserve Bank will consider the design aspects of a consolidated facility and consult with market participants.

The Reserve Bank will also be engaging with market participants on their contingency planning and operational readiness for negative interest rates on these facilities.

The Reserve Bank is establishing the regular publication of a Market Operations Statement with each Official Cash Rate (OCR) Review and Monetary Policy Statement. The Market Operations Statement will be published on the Reserve Bank’s website and Reserve Bank pages on Bloomberg and Refinitiv confirming the details and pricing of the Reserve Bank’s standing facilities.

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.

Domestic markets

For further information contact:

Vanessa Rayner
Head of Financial Markets
[email protected]

Te Okeroa
Manager, Market Operations
[email protected]

Media contact:

Brendan Manning
Senior Adviser External Stakeholders
DDI: +64 9 366 2643 | MOB: 021 923 217
Email: [email protected]