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MNI TEXT: BOC Boosts Term Repos, Takes 3 Other Liquidity Steps

By Greg Quinn
     OTTAWA (MNI) - Following is a statement from the Bank of Canada published
     The Bank of Canada (Bank) continues to take actions to support the
efficient and continuous functioning of Canadian financial markets by ensuring
that the Canadian financial system has sufficient liquidity and that financial
institutions can continue to extend credit to both households and businesses. To
that end, the Bank is announcing four measures today designed to support market
functioning given the rapidly evolving uncertainty around the impact of
     First, the Bank is increasing the frequency of its Term Repo operations to
at least twice a week starting Tuesday March 24, 2020. Operational details will
be communicated along with future upcoming operations on the Bank's website. 
The previously revised Term Repo terms and conditions remain in effect. The
details of the upcoming operations for the week of March 23, 2020 are as
     Auction  Amount     Date          Settlement Date  Term (Days) Maturity
Regular  $4 billion 24 March 2020 26 March 2020    175         17 September 2020
Regular  $8 billion 24 March 2020 26 March 2020    357         18 March 2021
Regular  $8 billion 26 March 2020 30 March 2020    360         25 March 2021
NHA MBS  $4 billion 26 March 2020 30 March 2020    87          25 June 2020
     Second, the Bank is announcing its intention to activate the Contingent
Term Repo Facility (CTRF) by April 3rd to counter any severe market-wide
liquidity stresses and further support the stability of the Canadian financial
system.  Upon activation, the CTRF would offer Canadian dollar term funding to
eligible counterparties on a standing, bilateral basis. This facility would
provide funding liquidity to a broad range of financial institutions that can
demonstrate significant activity in the Canadian money and/or bond markets, are
subject to federal or provincial regulation, and meet any other conditions the
Bank may require.  Terms and Conditions would be published upon activation.
     Stakeholders interested in signing legal documents or discussing their
eligibility to the CTRF are asked to reach out to the Bank.
     Third, following the previously announced Coordinated Central Bank Action
to Enhance the Provision of Global US Dollar Liquidity the Bank is announcing
that it intends to launch a USD Term Repo Facility, should the need arise.
Funding would be provided against a broad range of Canadian dollar collateral
eligible for the Standing Liquidity Facility. Upon activation, the US dollar
Term Repo Facility would provide US dollar liquidity to Canadian Primary Dealers
and operations would be done on a fixed-rate full-allotment basis and at
overnight index swaps + 25 bps. Terms and Conditions will be published at the
time of activation.
     Finally, reflecting the scale of liquidity operations the Bank is
undertaking and the associated increases in settlement balances, the operating
band will be narrowed to 25 basis points compared to 50 basis points previously.
Effective Monday, March 23rd, the deposit rate will be set to the current target
for the overnight rate.
     The Bank of Canada continues to closely monitor global and domestic market
developments and remains committed to providing all the liquidity the financial
system needs so that it can continue to serve Canadians.
--MNI Ottawa Bureau; +1 613-314-9647; email:
[TOPICS: M$C$$$,MK$$$$,M$$CR$,M$$FI$,MN$FI$,MN$MM$,MN$RP$]

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