New Zealand central bank gives more liquidity to companies – Reuters News


Reuters reports that "the Reserve Bank of New Zealand (RBNZ) said on Monday that it was deploying more tools to provide additional liquidity to the corporate sector and support market functioning to offset the impact of the coronavirus."

Reuters explains that a new weekly "Open Market Operation (OMO) will provide liquidity in exchange for eligible corporate and asset-backed securities",  quoting the RBNZ which explained this in a statement.

"The OMO will be held each Tuesday and will offer up to NZ$500 million ($300 million) for terms out to approximately three months, it said. The first operation will be held on March 31. The bank also said it will offer to purchase government bonds maturing on May 15, 2021, for liquidity management purposes. The offer opens on March 31," Reuters reported. 

Key notes

  • Reserve Bank of New Zealand says will provide liquidity in exchange for eligible corporate and asset-backed securities.
  • Reserve Bank of New Zealand says objective is to encourage banks to continue to fund their corporate clients by purchasing their debt securities.
  • RBNZ says to hold OMO each Tuesday, where corporate & asset-backed eligible securities will be acceptable as collateral on two name basis.
  • RBNZ says reserve bank continues to monitor market developments very closely, and stands ready to act further.
  • Says corporate OMO seen as temporary, to support market functioning.
  • Says offering to purchase NZ govt bonds maturing 15 may 2021 for liquidity management purposes.
  • Says OMO to be held at 11:00 am local time each Tuesday & to typically offer up to $500 mln dollars for terms out to about 3 months.
  • Says first corporate OMO operation to be held on March 31.
  • Says reserve bank will review operation in 12 months’ time or sooner if demand diminishes.

Market implications

The NZD is set to open lower according to the pre-open market dollar rates which have otherwise enjoyed a wave of buying since bottoming in the 18th March in the 0.5470s reaching as highs as 0.6068, Friday's high. With market's fixated on COVID-19, New Zealand has reported its first coronavirus-related death, a woman in her 70s on the west coast of South Island, which may not go down well for NZD bulls as New Zealand health officials confirm 63 new cases on Sunday. 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!


Latest Forex News

Editors’ Picks

AUD/USD: Stellar performance refreshes 18-week top above 0.6800, RBA eyed

Having dominated the markets at the week’s start, AUD/USD bulls keep the reins around 0.6810, high of 0.6814, at the beginning of Tuesday’s Asian session. RBA is widely anticipated to keep the current monetary policy unchanged.

AUD/USD News

USD/JPY looks for a firm direction above 107.00 with eyes on US civil unrest

USD/JPY fails to extend the previous day’s losses amid fresh challenges to risk. The yen pair dropped the previous day amid broad US dollar weakness. A lack of data from Japan keeps traders focused on the geopolitical issues for fresh impulse.

USD/JPY News

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Pointing beyond the Moon

XRP remains on the sidelines, although it could join the bullish run. The crypto market is starting to remind us of times gone by, with dazzling rises across the crypto board that draw the public's attention.

Read more

Gold: Bulls cheer immediate rising channel, aim for $1,753

Gold prices print four-day winning streak to probe $1,740. A four-day-old ascending trend channel formation and sustained trading above 200-HMA keeps buyers hopeful. $1,710 offers key support ahead of Wednesday’s low.

Gold News

WTI trading near session’s lows around $34.80 a barrel

Crude oil is trading near session’s lows as WTI is trading above the main SMAs on the four-hour chart. However, as the black gold remains fragile in a dominant downtrend, it remains to be seen if WTI can regain the 36.00 resistance. 

Oil News

Forex MAJORS

Cryptocurrencies

Signatures