MNI BRIEF: RBA To Adjust OMO Pricing From April 9

The Reserve Bank of Australia from April 9 will increase the price of all new open market operation (OMO) repos by 5 basis points to 10bp over the cash rate target as it transitions to an ample reserve system, Chris Kent, assistant treasurer (financial markets) told an industry forum on Wednesday. 

OMO will continue to be offered at a floating rate and the RBA will also introduce a seven-day term, in addition to the existing 28-day term, at each weekly OMO, Kent noted. 

“The Board agreed that the primary objective for monetary policy implementation was to achieve sufficient ‘monetary control,’” he added. “This involves the cash rate trading close enough to the target with other short-term interest rates tethered to the cash rate to be consistent with the desired stance of monetary policy.” 

The RBA revealed the switch to the ample reserve system in April 2024. Kent noted the change will have no impact on the cash rate.