Friday 7th November 2008 |
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Starting on Nov. 12, the central bank will operate a Term Auction Facility, which will offer as much as NZ$2 billion each Wednesday morning at 9:30 a.m., using approved collateral, it said in a statement. The TAF, which will be for terms of three, six and 12 months, will replace the bank's daily Open Market Operations, it said.
The regular OMOs may be held less frequently, for smaller volumes and with shorter maturity dates, the bank said.
The Reserve Bank will also hold a weekly tender of bills, as needed, to maintain settlement cash at an appropriate level, it said. The RB bill tenders of up to NZ$2 billion and for a term of about three months, will be held at 2 p.m. on Wednesday afternoons.
The facilities add to measures the central bank has employed this year to underpin banking system liquidity after it widened the range of securities it would accept as collateral to include Residential Mortgage Backed Securities.
Two banks have had RMBS structures approved by the Reserve Bank and more approvals are expected, it said.
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