The Reserve Bank today announced a facility to improve the anchoring of wholesale short-term interest rates at the Official Cash Rate (OCR).
From 20 July 2022, the Reserve Bank will allow eligible counterparties to lend New Zealand dollars (NZD) through a Standing Repurchase (Repo) Facility.
The initial settings for the Standing Repo Facility are as follows, and will be subject to regular review:
- The Standing Repo Facility will allow for eligible counterparties to lend NZD overnight and from tomorrow to the next day, on a secured basis.
- The collateral provided by the Reserve Bank as security for the NZD will be nominal NZ Government Bonds (NZGBs) as general collateral.
- NZD deposited through the Standing Repo Facility will be remunerated at the Official Cash Rate (OCR) less 15 basis points.
- Settlement may occur on a same-day or a T+1 basis (transaction day plus 1 banking day).
- The Standing Repo Facility will be available between 3:00pm and 4:00pm New Zealand Time every business day and a total facility size of $5 billion will be available for each value date.
- The operation of this facility and the rules and guidelines applying to it are detailed on the Operating Rules and Guidelines page.
The facility will be available from 20 July 2022.
Details of the Standing Repo Facility will be published on the Reserve Bank’s pages on Bloomberg and Refinitiv, and on the Reserve Bank’s Standing facilities (D12) statistical tables.
This facility announcement relates to the implementation of monetary policy, and has no implications for the Reserve Bank’s monetary policy stance.