RBNZ Reserve Bank of New Zealand, funding

RBNZ: Corporate facility another step to support market functioning

The Reserve Bank is deploying another tool to provide additional liquidity to the corporate sector, and support smooth market functioning.

A new weekly Open Market Operation (OMO) will provide liquidity in exchange for eligible Corporate and Asset-Backed securities. Further operational details are available in a Domestic Markets release.

Assistant Governor Christian Hawkesby said this facility would provide another channel for banks to continue funding their corporate clients.

“Our objective is to encourage banks to continue to fund their corporate clients by purchasing their debt securities, given the confidence that these securities can be funded by exchanging them with us for cash. In this way, by banking the banks, we are ensuring large businesses can better manage their cash flows, and lower their funding costs,” Mr Hawkesby said.

A commitment to market functioning

The Reserve Bank has announced a number of additional tools to provide liquidity and support market functioning.

Mr Hawkesby emphasised that the Reserve Bank continues to monitor market developments very closely, and stands ready to act further to ensure markets and the financial system operate in a stable and efficient manner.

“We are committed to support smooth market functioning.”

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