Borrow
RBA provides banks with $9 billion in liquidity
The Reserve Bank of Australia has met a sharp increase in demand for additional liquidity from the banks in light of the growing market uncertainty from market volatility.
RBA provides banks with $9 billion in liquidity
The Reserve Bank of Australia has met a sharp increase in demand for additional liquidity from the banks in light of the growing market uncertainty from market volatility.
The Reserve Bank of Australia (RBA) has provided the banking sector with a significant liquidity boost on the overnight money market, purchasing bank assets through repurchase (repo) agreements totalling $8.8 billion – well above the daily average.
Over 60 per cent ($5.6 billion) of the transactions involved the purchase of transaction terms of 95 days.
This follows a similar move from the US Federal Reserve following President Donald Trump’s ban on travel from Europe in light of the coronavirus (COVID-19) outbreak.
President Trump’s decision sent ripples through international markets, including Australia, prompting traders to sell assets and strain liquidity in credit markets.
RBA governor Philip Lowe hinted at providing the banking sector with liquidity support following the monetary policy board’s decision on the official cash rate to a new record low of 0.5 per cent earlier this month.
“Australia’s financial markets are operating effectively, and the bank will ensure that the Australian financial system has sufficient liquidity,” Mr Lowe said.
The RBA’s response to demand for additional liquidity from Australia’s banking sector also followed Prime Minister Scott Morrison’s release of a $17.6 billion stimulus package to help support the domestic economy as it grapples with economic side effects of COVID-19.
The RBA will now conduct repo operations of six months maturity or longer at least weekly as long as the market conditions warrant a response. 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.
RELATED ARTICLES
About the author
About the author
Banking
Open banking in action: An early adopter’s playbook—and the ROI case for Australian brokers
Open banking is shifting from conference buzzword to operational backbone in Australia’s broking sector. Early adopters are using bank-grade data and AI to compress underwriting cycles, cut compliance ...Read more
Banking
Australian brokerage pedals ahead using consented data for a speedy advantage
Open banking is no longer a concept; it is an operating model shift changing how brokers originate and package credit. Australia’s early movers, backed by the Consumer Data Right (CDR) and a ...Read more
Banking
BOQ’s mortgage squeeze is a market signal: where banks will win next as competition bites
Bank of Queensland’s shrinking home-loan book is more than a single-institution story; it’s a barometer of how Australia’s mortgage market is being rewired by broker power, non-bank agility and ...Read more
Banking
RBA’s next move: Why a November cut could reset corporate risk budgets
Australia’s unemployment rate has risen to a four‑year high, sharpening the case for another Reserve Bank easing as growth moderates. With GDP expanding 0.6% in the June quarter and 1.8% year on year, ...Read more
Banking
PayPal Open Debuts in Australia: A Unified Platform for Business Growth
Sydney, 14 October 2025 – In a significant move to bolster commerce capabilities for businesses across Australia, PayPal has officially launched its new merchant platform, PayPal OpenRead more
Banking
RBA holds interest rates steady at 3.6% amid strong labour market and inflation concerns
In a widely anticipated move, the Reserve Bank of Australia (RBA) announced that it would maintain the cash rate at 3.6%. The decision was unanimous, reflecting a cautious approach as the central bank ...Read more
Banking
Hardship is the new conduct frontier: A bank’s playbook for turning ASIC scrutiny into ROI
ASIC has put financial hardship on its 2025 enforcement radar, shifting lender performance from a customer service problem to a board-level conduct risk. This case study examines how an Australian ...Read more
Banking
RBA flags price uplift as Home Guarantee expansion accelerates: what it means for banks, builders and the bottom line
Australia’s expanded Home Guarantee Scheme (HGS) has been brought forward to 1 October, compressing a multi‑year policy shift into weeks. The RBA expects the changes to lift borrowing capacity and add ...Read more
Banking
Open banking in action: An early adopter’s playbook—and the ROI case for Australian brokers
Open banking is shifting from conference buzzword to operational backbone in Australia’s broking sector. Early adopters are using bank-grade data and AI to compress underwriting cycles, cut compliance ...Read more
Banking
Australian brokerage pedals ahead using consented data for a speedy advantage
Open banking is no longer a concept; it is an operating model shift changing how brokers originate and package credit. Australia’s early movers, backed by the Consumer Data Right (CDR) and a ...Read more
Banking
BOQ’s mortgage squeeze is a market signal: where banks will win next as competition bites
Bank of Queensland’s shrinking home-loan book is more than a single-institution story; it’s a barometer of how Australia’s mortgage market is being rewired by broker power, non-bank agility and ...Read more
Banking
RBA’s next move: Why a November cut could reset corporate risk budgets
Australia’s unemployment rate has risen to a four‑year high, sharpening the case for another Reserve Bank easing as growth moderates. With GDP expanding 0.6% in the June quarter and 1.8% year on year, ...Read more
Banking
PayPal Open Debuts in Australia: A Unified Platform for Business Growth
Sydney, 14 October 2025 – In a significant move to bolster commerce capabilities for businesses across Australia, PayPal has officially launched its new merchant platform, PayPal OpenRead more
Banking
RBA holds interest rates steady at 3.6% amid strong labour market and inflation concerns
In a widely anticipated move, the Reserve Bank of Australia (RBA) announced that it would maintain the cash rate at 3.6%. The decision was unanimous, reflecting a cautious approach as the central bank ...Read more
Banking
Hardship is the new conduct frontier: A bank’s playbook for turning ASIC scrutiny into ROI
ASIC has put financial hardship on its 2025 enforcement radar, shifting lender performance from a customer service problem to a board-level conduct risk. This case study examines how an Australian ...Read more
Banking
RBA flags price uplift as Home Guarantee expansion accelerates: what it means for banks, builders and the bottom line
Australia’s expanded Home Guarantee Scheme (HGS) has been brought forward to 1 October, compressing a multi‑year policy shift into weeks. The RBA expects the changes to lift borrowing capacity and add ...Read more
