Market Operations
As per the RBA’s announcement on 25 August 2026, open standing facility (SF) repos will be discontinued in early 2027 (see Speech by David Jacobs, Head of Domestic Markets – The Road to Ample – Towards a Demand-driven Liquidity Regime for more information). The effective date will be announced in the coming months. On the effective date, all open repo limits will be reduced to zero and any outstanding open repo SF positions will be closed.
Until then, existing open SF repo limits remain in place. However, with immediate effect, the RBA will no longer accept requests to increase these limits.
For RITS members that settle after-hours transactions across their own Exchange Settlement Account (ESA) via the Fast Settlement Service (for New Payments Platform payments) or the Low Value Settlement Service (for direct entry obligations), the RBA will continue to apply minimum ES balance requirements for this purpose. The next regular review of the size of these requirements will occur in the coming months, with the new recommended ES balance requirements to take effect on the effective date when open repo is discontinued.
The Reserve Bank transacts in domestic financial markets to implement monetary policy decisions and facilitate the smooth functioning of the payments system.
Conventionally, an important aspect of implementing policy decisions involves the Reserve Bank transacting in domestic financial markets in its open market operations to keep the operational target for monetary policy – the cash rate – consistent with the target rate set by the Monetary Policy Board. The cash rate is the interest rate on unsecured overnight loans between banks.
The Reserve Bank also undertakes transactions in the foreign exchange market on a regular basis. Many of these transactions arise out of the provision of foreign exchange services to clients, with the Australian Government the Bank’s largest client. The Reserve Bank manages Australian dollar liquidity through foreign exchange swaps as necessary. Transactions are also undertaken in the foreign exchange market, as well as foreign asset markets, in managing Australia’s foreign currency reserves. Foreign currency reserve assets are held on the balance sheet of the Bank, with the currency allocation, asset allocation and interest rate risk on investments managed against benchmark targets. Foreign currency reserves are deployed from time to time to effect policy operations in the foreign exchange and domestic cash markets.