Reserve Bank liquidity accommodation for new payments system
The Reserve Bank of New Zealand will be launching its new payments and securities depository systems, ESAS and NZClear, on 24th February 2020.
The revision and upgrade of these two systems has been approximately six years in the making, and the entire application and supporting infrastructure have been completely rebuilt.
To help banks adapt to the new liquidity dynamics, and in keeping with previous industry-wide changes to New Zealand’s payments systems, the Reserve Bank has decided to reduce the cost of overnight borrowing in its standing facility for two months from 24 February 2020 until 24 April 2020. During this period, the cost of overnight borrowing will reduce from 50 basis points to 25 basis points over the Official Cash Rate.
There are no monetary policy implications that follow from this short-term adjustment.
The Reserve Bank will, as always, closely monitor the payment system and short-term money market. If necessary, the Bank will act to ensure that the payment system continues to run in a stable and efficient manner.
For further information contact:
Head of Financial Markets
Manager, Financial Markets
Phone: 09 300 7704