RBNZ introduces weekly full allotment liquidity operations
The Reserve Bank of New Zealand will introduce weekly full allotment operations to inject liquidity into the market. This change follows a review of its liquidity management framework and aims to provide market participants with certainty.
Certainty for market participants
The Reserve Bank of New Zealand (RBNZ) has concluded its review of its liquidity management framework, introducing significant changes to its Open Market Operations (OMO).
The RBNZ will now offer weekly full allotment operations to inject liquidity into the financial system.
Director of Financial Markets Adam Richardson stated that these operations will provide market participants with certainty, allowing them to determine their demand at a fixed spread to the Official Cash Rate (OCR).
These new weekly operations will complement the existing Overnight Reverse Repo Facility, which remains available daily.
The first operation under this revised framework is scheduled for Thursday, 2 April 2026, at 11:30 AM NZT.
The RBNZ will monitor the impact to ensure consistency with effective monetary policy implementation and to support financial stability.
Committed Liquidity Facility on track for 2028
Beyond the immediate changes to OMO, the consultation also gathered input on the design of a Committed Liquidity Facility (CLF).
Feedback received from market participants has been instrumental in informing the RBNZ's in-principle decisions regarding the CLF, as well as identifying areas requiring further development.
The RBNZ confirms that the CLF remains on schedule to be fully implemented by December 2028.
This timeline coincides with the anticipated effective date of the new Deposit Takers Act standards, ensuring a comprehensive and robust liquidity framework for the New Zealand financial system.
The RBNZ will provide further updates as work on the CLF progresses.