Bank of Canada expands securities repo operations
25 January 2021 Canada
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The Bank of Canada has made changes to its securities repo operations (SROs) in order to increase the availability of its holdings of Government of Canada securities.
The central bank’s SRO programme provides a temporary source of Government of Canada nominal bonds and treasury bills to primary dealers to support liquidity in the securities financing market.
The bank makes up to 50 per cent of its holdings of these securities available on an overnight basis through daily repos.
Under the new rules, which take effect today, the maximum total bidding amount across all securities in the SRO will increase to CAD 1 billion for each eligible participant.
The maximum bid rate is set at 15 basis points, although the bank withholds the right to adjust the size, pricing and other parameters of the programme to achieve its objectives.
The SRO will be conducted every day the Bank of Canada is open, the term to maturity of each SRO is one business day.
The eligible counterparties are Canadian primary dealers in Government of Canada securities.
The bank says it continuously monitors market conditions and remains committed to providing the required support for the well-functioning of the Canadian securities financing market.
The bank launched the securities repo operations on 27 July 2020 and simultaneously suspended its securities lending programme.
The central bank’s SRO programme provides a temporary source of Government of Canada nominal bonds and treasury bills to primary dealers to support liquidity in the securities financing market.
The bank makes up to 50 per cent of its holdings of these securities available on an overnight basis through daily repos.
Under the new rules, which take effect today, the maximum total bidding amount across all securities in the SRO will increase to CAD 1 billion for each eligible participant.
The maximum bid rate is set at 15 basis points, although the bank withholds the right to adjust the size, pricing and other parameters of the programme to achieve its objectives.
The SRO will be conducted every day the Bank of Canada is open, the term to maturity of each SRO is one business day.
The eligible counterparties are Canadian primary dealers in Government of Canada securities.
The bank says it continuously monitors market conditions and remains committed to providing the required support for the well-functioning of the Canadian securities financing market.
The bank launched the securities repo operations on 27 July 2020 and simultaneously suspended its securities lending programme.
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