MEDIA RELEASE No: 2004-11 Date: 30 September 2004 Embargo: For Immediate Release

SECURITIES LENDING ARRANGEMENTS

The Australian Office of Financial Management (AOFM) has today announced a new lending facility for Australian Government Treasury bonds.

Under this facility, specific lines of Australian Government Treasury bonds will be lent by the Reserve Bank, on behalf of the AOFM, to market participants in return for other Australian Government securities. Details on the operational aspects of this facility can be found on the AOFM's website http://www.aofm.gov.au.

With the introduction of this facility, the Reserve Bank will discontinue the special stock lending facility that it had been providing from its own portfolio of Australian Government securities. In future, the Reserve Bank will act like any other holder of securities, lending its holdings of securities at market prices. It is envisaged that the bulk of this will continue to take place through repurchase agreements undertaken as part of the Reserve Bank's open market operations.