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10 July 2001
Meanwhile, the Reserve Bank of Australia (RBA) has expanded the range of eligible collateral for its domestic repurchase agreements. Such agreements are entered into with financial institutions which, as participants in the Australian payments clearing system, must hold exchange settlement accounts with the RBA. They facilitate payments clearance where the account would otherwise contain insufficient funds.
Previously, eligible collateral was limited to securities issued in Australia by state and territory central borrowing authorities. It has been expanded to include Australian dollar-denominated securities issued by those authorities in the euro-markets and lodged in the Austraclear system as euro-entitlements. The RBA will also consider, on a case-by-case basis, accepting Australian dollar-denominated, triple A-rated securities issued by supranationals.
These changes took effect on June 12 2001. It is expected that they will lead to a more liquid market in qualifying Kangaroo bonds and a significant increase in the value of eligible euro-entitlements lodged in the Austraclear system.
For further information on this topic please contact Karen Fairbairn at Atanaskovic Hartnell by telephone (+612 9777 7000) or by fax (+612 9777 8777) or by email (firstname.lastname@example.org).
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