MNI BRIEF: BOC to Discontinue BA and Mortgage Bond Facilities

The Bank of Canada said Thursday it will discontinue programs to purchase bankers' acceptances and mortgage bonds in the week of Oct. 26, citing improving market conditions.

Term repo purchases will also be scaled back to biweekly from weekly effective Oct. 21 according to a market notice from Ottawa, and the types of eligible securities are also being scaled back. Sources have told MNI the BOC will likely tweak asset purchases rather than keep growing its balance sheet that hit a record earlier this year.

"The Bank will continue to monitor market conditions and, if warranted, may further revise its programs, including making changes to the size and maturity tranches of the term repo operations," the central bank's notice said. "The Bank remains committed to providing liquidity as required to support the functioning of the Canadian financial system. Any discontinued facilities can be restarted if necessary."