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Liquidity management in the New Zealand banking system

Author

Listed:
  • Jan Frazer

    (Reserve Bank of New Zealand)

Abstract

This article provides an overview of how the Reserve Bank (the Bank) conducts liquidity management. It describes the two areas of liquidity management conducted by the Bank - what the Bank does to maintain a stable and sufficient supply of system liquidity and what it does to ensure individual banks have access to liquidity to meet daily transactional obligations through the payments and settlement system. It also explains how the Bank supports its monetary policy implementation by managing the level of liquidity in the banking system so as to avoid large fluctuations in short-term interest rates.

Suggested Citation

  • Jan Frazer, 2004. "Liquidity management in the New Zealand banking system," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 67, December.
    • Handle: RePEc:nzb:nzbbul:december2004:1
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    File URL: http://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Bulletins/2004/2004dec67-4frazer.pdf
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    References listed on IDEAS

    as
    1. David Archer & Andy Brookes & Michael Reddell, 1999. "A cash rate system for implementing monetary policy," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 62, March.
    2. John Tait & Michael Reddell, 1991. "The operation of monetary policy," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 54, march.
    3. Andy Brookes, 1999. "Monetary policy and the Reserve Bank balance sheet," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 62, December.
    4. anonymous, 1987. "The basics of liquidity management," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 50, september.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Guender, Alfred V. & Rimer, Oyvinn, 2008. "The implementation of monetary policy in New Zealand: What factors affect the 90-day bank bill rate?," The North American Journal of Economics and Finance, Elsevier, vol. 19(2), pages 215-234, August.
    2. Ian Nield, 2006. "Changes to liquidity management regime," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 69, pages 1-6, December.
    3. Yueh-Yun C. O'Brien, 2007. "Reserve requirement systems in OECD countries," Finance and Economics Discussion Series 2007-54, Board of Governors of the Federal Reserve System (U.S.).
    4. Skeie, David R., 2008. "Banking with nominal deposits and inside money," Journal of Financial Intermediation, Elsevier, vol. 17(4), pages 562-584, October.

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