Review of the Reserve Bank's Liquidity Management Operations

Release date
17 March 2006

The Reserve Bank has issued a consultation document (PDF 191KB) on proposed changes to the Bank's liquidity management regime. Submissions on the consultation paper are due by the 20 April 2006.

One of the Bank's priorities for this financial year has been to review its liquidity management operation. The review commenced in mid-2005 and has highlighted that the current liquidity management system faces some issues which need to be resolved.

Under the current system the available collateral is not expanding at a similar rate to demand for liquidity. The resulting pressures affect costs to participants and the credit risks faced by the Reserve Bank.

This is a proposed technical adjustment and there are no monetary policy implications.

For further details contact: liquidity.review@rbnz.govt.nz .