The Reserve Bank of New Zealand has opened a consultation under its Liquidity Management Review, covering how it manages system liquidity (settlement cash) to keep short-term market interest rates trading near the Official Cash Rate and ensure sufficient liquidity for payments and settlements. The work runs alongside a review of prudential liquidity policy that is intended to become a Liquidity Standard under the Deposit Takers Act. The consultation focuses on the design of the Reserve Bank’s Open Market Operations in an ample settlement cash environment, with the stated aim of supporting effective monetary policy implementation while facilitating market liquidity and financial stability. It also addresses the size, fees and operationalisation of the Committed Liquidity Facility, which the Reserve Bank describes as necessary for deposit takers to meet liquidity requirements while maintaining a sufficient supply of liquid assets in the market for other investors; respondents can comment on one or both parts. The consultation is open until 31 October.
Reserve Bank of New Zealand 2025-09-09
Reserve Bank of New Zealand launches consultation on liquidity management framework and Committed Liquidity Facility design
The Reserve Bank of New Zealand has initiated a consultation under its Liquidity Management Review to refine system liquidity management and Open Market Operations, aiming to align short-term market interest rates with the Official Cash Rate and ensure market liquidity and financial stability. The consultation, which includes the Committed Liquidity Facility's size, fees, and operations, is open until 31 October.