RBA announces measures to enhance the functioning of financial markets

On 24 September the RBA announced two measures to contribute to the smooth functioning of domestic financial markets, a foreign exchange swap facility with the Federal Reserve to address the elevated pressures in US dollar short-term funding markets in the Asian time zone; and a domestic term deposit facility to further enhance the flexibility of domestic liquidity management operations.

The Reserve Bank and the Federal Reserve have agreed on a US$10 billion swap line to provide US dollar liquidity in Australia in exchange for Australian dollars. The swap serves to alleviate a shortage of US dollar liquidity which has affected market participants around the world including in the Asia-Pacific time zone. The US dollars will be made available against collateral to local market participants by the Reserve Bank through an auction...more>>

To further enhance the flexibility of its domestic liquidity management operations, the Reserve Bank will also offer a short-term deposit facility, to be known as RBA Term Deposits. The facility will be available to those institutions holding an Exchange Settlement Account (ESA) and to authorised deposit-taking institutions (ADIs) that are members of RITS. The Bank will conduct auctions at which eligible institutions will be able to bid for deposits...more>>