The RBA will extend the lifeline it offered banks last week as Australian markets continue to suffer from liquidity shortages amidst the global sell-off.
The RBA will now conduct repo operations of six-months maturity or longer at least weekly as long as market conditions warrant. It will also continue to conduct one-month and three-month repo operations until further notice.
“Australia's financial institutions, market participants and market infrastructure providers have undertaken substantial investments in their operational capability to deal with the effects of the virus,” the Council of Financial Regulators said in a statement.
“At the same time, trading liquidity has deteriorated in some markets and financial institutions are having to adjust to a more volatile environment. The financial regulators are in regular contact with financial institutions, market participants and market infrastructure providers.”
The announcement comes as ASIC issues directions to a number of large equity market participants requiring them to limit the number of trades executed each day until further notice.
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