Change to Securities Lending Facility

7 April 2009

Following the decision today by the Board of the Reserve Bank of Australia (RBA) to reduce the target cash rate, there has been a change to the operation of the AOFM securities lending facility.

The interest rate payable to a counterparty on cash borrowed by the RBA under a repurchase agreement in loaned Treasury Bonds will be the RBA cash rate target less a margin now calculated as the minimum of

  • 300 basis points; and
  • 25 basis points below the RBA cash rate target.

With the target cash rate at 3.00% effective tomorrow, Wednesday 8 April 2009, the margin will therefore become 275 basis points on this day and the interest rate payable to a counterparty will become 25 basis points.

The interest rate payable by a counterparty on cash lent by the RBA under a reverse repurchase agreement against the collateral securities will remain at the RBA cash rate target.

Last updated: 21 March 2014