Influences on settlement cash - D10

Descriptions of settlement cash

Settlement cash balances The surplus cash held at the Bank in Exchange Settlement Account System (ESAS) accounts at the end of a banking day.

Cash at beginning of month The cash at the beginning of the month is the opening cash balance of the Exchange Settlement Accounts (ESA).

Government cash influence The Government cash influence is the Government revenue (taxes provided through Inland Revenue Department and Customs), less government expenditure and interest paid on Government bonds and Treasury bills.

Reserve Bank Transactions Includes Currency in circulation and various transactions that affect accounts held with the RBNZ. Currency in circulation refers to notes and coins issued by the RBNZ less those held in the vaults of registered banks.

Other (Government debt transactions) The net amount of miscellaneous Government debt transactions.

Foreign exchange Foreign exchange deals transacted by the New Zealand Government and the RBNZ.

Net reverse repos The net amount of reverse repos, transacted by the RBNZ to help manage the Government's daily liquidity flows.

Net repos The net amount of repos, transacted by the RBNZ to help manage the Government's daily liquidity flows.

Net FX swaps and Basis swaps The net amount of foreign exchange swap transactions (whether buying or selling the NZD) transacted by the RBNZ to help manage the RBNZ's and Government's daily liquidity flows.

Net seasonal Treasury bills The net amount of seasonal Treasury bills, transacted by the RBNZ to help manage the Government's daily liquidity flows.

Net overnight reverse repo facility The net amount of overnight reverse repos transacted by RBNZ with other parties. The RBNZ will be willing to enter into overnight reverse repos on demand, with those parties who have entered into a Master Repurchase Agreement with the RBNZ. These transactions are done at a margin above the OCR. The OCR is an interest rate set by the RBNZ to implement monetary policy, so as to maintain price stability.

Net auto-repo rollover The net amount (borrowings less repayments) of auto-repo. Settlement account holders can enter into automated intra-day borrowing with the RBNZ. This borrowing can be rolled overnight, but at an interest rate of 30 basis points above the OCR. The auto-repo facility was discontinued in October 2006 following implementation of the new liquidity management regime.

Cash as at end of month The surplus cash held at the bank in Exchange Settlement Account System (ESAS) accounts at the end of a banking day.

Average settlement cash Average daily balance of the exchange settlement accounts.

Settlement cash balances The surplus cash held at the Bank in Exchange Settlement Account System (ESAS) accounts at the end of a banking day.

Overnight reverse repo facility A counterparty that has signed a Master Securities Repurchase Agreement sells government securities to the Bank in exchange for cash on an overnight basis. The counterparty agrees to buy the securities back at a stipulated price the next banking day. Currently the interest rate on these transactions is 25 basis points above the Official Cash Rate (OCR).

Autorepo rollover facility A counterparty that has signed a Master Intra-day Securities Repurchase Agreement can borrow cash from the Bank and repay the cash intra-day (within the 24 hour banking day). If the intra-day transaction is not repaid at the end of the business day, it automatically rolls over into an inter-day transaction at a rate of 30 basis points above the Official Cash Rate (OCR). The auto-repo facility was discontinued in October 2006 following implementation of the new liquidity management regime.

Net Bond lending facility Bonds borrowed in the Bank's bond lending facility