The Reserve Bank of New Zealand announced last week that it will wind back emergency funding and liquidity measures introduced at the height of the GFC, from the end of this month. Its Term Auction Facility under which banks have been able to borrow for periods from three to 12 months against RMBS and other securities pledged, will be removed.
This will be partially mitigated by extension of the bank's Tuesday open market operations to allow all eligible securities to be repurchased for periods of up to three months. At present, only approved securities can be repo'ed for up to two months.
The weekly open market operations will be reviewed in March next year for discontinuation, if market conditions allow.
The maximum term for overnight repos will be reduced from one month to overnight and weekly Treasury Bill tenders are to cease.
The Reserve Bank of Australia has not made any changes to its emergency measures since confirming in March the continuation of measures introduced last November.
Nevertheless, the chart below shows that pressure has come off the banks repo facilities and usage is now back to normal.
20091019 RBA repo activity