Reserve Bank of New Zealand
News Release
10 February 2006, 9.30am
Reserve Bank to raise Settlement Cash Level to $2,000 million
The Reserve Bank of New Zealand will raise the Settlement Cash Level (SCL) from its current level of $500 million to
$2,000 million, for value date 13 February 2006.
This change in the settlement cash level reflects the Reserve Bank's concern over liquidity pressures in the New Zealand
money market created by the upcoming New Zealand Government Bond maturity on 15 February 2006. The bond maturity reduces
the amount of collateral available for banks to use. Banks use collateral to raise funds for their intra-day liquidity
to meet payment and settlement obligations.
The Reserve Bank will assess the SCL on an ongoing basis.
This is a technical adjustment to the way the Reserve Bank conducts its liquidity management operations and all other
aspects of its daily operations remain unchanged. This change has no monetary policy significance.
Technical information on how the Reserve Bank conducts its liquidity management operations can be found in the December
2004 Bulletin located on the Reserve Bank's website (www.rbnz.govt.nz).
ENDS