Market Test Portfolio

The Reserve Bank's Market Test Portfolio exists for the purposes of dealer education and information gathering. Currently this portfolio allows the Domestic Markets (DM) and International & Markets Analysis (IMA) teams to transact in a limited number of instruments (e.g. NZ$ bank bill futures). This assists the teams in achieving two of their main objectives, namely:

  • to be active in the relevant domestic markets, and
  • to improve market intelligence and market profile.

Positions in these instruments can be taken on a short or medium-term basis. Transactions must be tagged as short or medium term. Short-term transactions can only be held in-between Official Cash Rate (OCR) announcements and must be closed out by 4.30pm on the day prior to an OCR announcement. Medium-term positions may be held over an OCR announcement but are subject to the following constraints:

  • Medium-term positions must be frozen three weeks prior to a Monetary Policy Statement.
  • Medium-term positions must be frozen one week prior to an OCR announcement.

Positions taken in the Market Test Portfolio are for small volumes and are subject to specific internal limits and guidelines.

The outcome of the deals transacted in the Market Test Portfolio will be reported in the Reserve Bank's Annual Report in terms of the profit/loss generated by this activity.