Improving global financial market conditions are prompting the Reserve Bank of New Zealand to withdraw several temporary crisis measures put in place last year to help ensure day-to-day liquidity.
The changes will kick in from November 1, and reflect the fact that many of the special facilities had barely been
used in the last six months, Deputy Governor Grant Spencer said.
"The Bank feels that the time has come to start removing and consolidating temporary crisis facilities."
The RBNZ move is consistent with growing global confidence in more stable and recovering economic conditions, and increasing pressure in the United States and Europe to review stimulus measures introduced late last year during the period of deep financial market instability.
The four temporary measures being withdrawn are:
* Removal of the Term Auction Facility that allows banks to borrow 3, 6 and 9 month money using eligible collateral;
* A change to allow all eligible securities, including corporate securities and residential mortgage backed securities, as collateral in the regular Tuesday Open Market Operation (OMO);
* The removal of one month borrowing facilities offered by the RBNZ to allow overnight borrowing only;
* Withdrawal of the weekly Reserve Bank bill tender, although bank bills will continue to be offered in the daily OMO.
- BUSINESSWIRE
