In the end, ten per cent of the Term Funding Facility for Australian banks was left untouched.

The Reserve Bank’s TFF facility closed to new drawdowns last Wednesday, on 30 June 2021, at which time A$187.7 billion of funding was outstanding.

Over the last three weeks banks soaked up $42 billion in funding, including $25 billion in the final week.

The facility’s low-cost funding at 0.10 per cent for 3 years will continue to support low borrowing costs for banks until mid-2024.

Since the TFF was first opened to banks in early April 2020, the Reserve Bank of Australia’s balance sheet has effectively doubled in size to $540 billion.

Exchange settlement balances ended last week at a record $342 billion, and surplus ES balances at $317 billion.

“There are clear opinions in the market the RBA balance sheet will rise to, say, $650 billion to $700b during this new fiscal year,” Peter Sheahan, director of money markets at Curve Securities wrote in his weekly missive on Friday.

“That is staggering amount of additional liquidity within the system which could unleash any amount of asset growth in any economic sector,” Sheahan said.