Changes to liquidity management regime
In July 2006, the Reserve Bank commenced implementation of changes to its liquidity management regime. Under the existing regime, there had been increasing evidence of insufficient liquidity in the banking system at various times and some inefficiencies in the way in which it was provided. Under the new regime, there has been a significant increase in the level of cash left in the payment system overnight. This article details the motivation for the changes and the key features of the new regime and provides some initial observations of their impact. The article notes that the implementation of the new regime, which occurred over a four-month period, has been largely uneventful and that there have been few signs of stress since the Reserve Bank liquefied the system.
Volume (Year): 69 (2006)
Issue (Month): (December)
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Anonymous, 1999. "Monetary policy implementation: changes to operating procedures," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 62, March.
- 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.
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