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