The Reserve Bank balance sheet is not yet out of control, but it will be.
Handing off to Peter Sheehan from Curve Securities for an overview of the last week at the Reserve Bank of Australia: “The Total Funding Allowance under the Term Funding Facility for banks has been increased by $5.6 billion to $190.6 billion,” he said in a late Friday note for clients.
“The monthly credit data saw additional allowances for SME lending rise by $3.4 billion and the allowance for Large Business Lending increased by $2.2 billion,” a rare trend in this data.
“Only $319 million was drawn under the TFF though, as financial conditions remain highly accommodative from burgeoning retail and business liabilities,” he wrote.
Sheehan means deposits and his employer Curve advises on working capital management.
Total outstandings under the TFF are now $92.9 billion, repayable by 2024.
Twelve weeks remain for $98 billion to be drawn, as the program ends on 30 June 2021.
“Balances banks held under Exchange Settlement accounts with the RBA surged past $200 billion in the 2 weeks since my last update,” Sheehan wrote.
“ES and Surplus ES rose by a massive $21.5 billion and $23.9 billion respectively to be $209 billion and $182 billion.
The RBA’s Balance Sheet grew by $15 billion in the same fortnight from $385 billion to $400 billion.
“Expect a further $3 billion of growth this week given the QE purchases listed below,” Sheehan said.