The Bank of Canada’s (BoC) overnight reverse repo operations will be conducted on an ad-hoc basis and only when broad overnight general collateral funding conditions warrant. Previously, ORR operations were conducted on a daily basis. This is in response to the Canadian Overnight Repo Rate Average (CORRA) setting a few basis points above the BoC’s policy rate target has in recent weeks.
Additionally, the timing of the ORR operations, when conducted, will change from 10:30 (ET) to 11:45 (ET) with a deadline of 12 noon for participants to submit tenders. This new timing aligns with the timing of the Overnight Repo (OR) operations and leaves more time for transactions to take place among market participants before the BoC determines whether conditions warrant an injection or withdrawal of liquidity via ORs or ORRs. There is no change to counterparty limits.
The Bank’s Overnight Reverse Repo (ORR) operations help reinforce the BoC’s target for the overnight rate in a floor system with large settlement balances. ORR operations support the effective implementation of monetary policy by withdrawing liquidity to counteract downward pressure on overnight repo rates. These changes are of an operational nature and do not indicate a change in monetary policy.