Media Release Domestic Market Dealing Arrangements

In March of this year, the Reserve Bank announced a number of changes to its domestic market dealing arrangements (Media Release 2004 03). One of the changes was the addition of domestic securities issued by the State and Territory central borrowing authorities (Semis) to the list of securities which the Reserve Bank is willing to purchase on an outright basis. Until then, the Reserve Bank had limited its outright holdings to Commonwealth Government securities (CGS).

The Reserve Bank soon after began purchasing short-dated Semis (that is, debt with a remaining maturity of less than around 18 months) in its regular daily market operations. It has since consulted with market participants about the most appropriate arrangements for buying longer dated stock and it has been agreed that such purchases (to be known as Long dated Liquidity Operations) will take place in a separate round of dealing in the afternoon. Any purchases of long dated CGS will also take place at that time.

It is envisaged that such operations will be held around once a month. The Reserve Bank intends holding the first of its operations to purchase longer-dated debt on 22 September.

Information on the specific arrangements for Long-dated Liquidity Operations, including eligible securities, eligible counterparties and timing is available on the Reserve Bank's website at http://www.rba.gov.au under Domestic market Operations/Operational Notes.