Brief
Bank of Canada expands two‑week repo operations to curb CORRA pressure
Deputy governor Toni Gravelle said the central bank is regularly raising the two‑week repo size to ease strain on the CORRA rate.
By Felo News Desk · Published
The Bank of Canada said it is boosting the size of its two‑week repurchase‑agreement (repo) operations to lessen upward pressure on the Canadian Overnight Repo Rate Average (CORRA), according to a Financial Post report on 29 September.
What happened
The central bank announced that it will increase the amount of funds offered in its two‑week repo program. The move is intended to provide additional liquidity to the market and to keep the CORRA rate from climbing further.
What the reports add
Financial Post reported that the Bank of Canada is "trying to reduce upward pressure on CORRA by regularly increasing the size of its two‑week repo operations," citing remarks from a senior official.
What was said
Bank of Canada deputy governor Toni Gravelle told Financial Post that the institution "cannot tolerate only so much upward pressure" on CORRA and that the repo expansion is a tool to manage that pressure.
How it came about
Earlier in the year, the Bank of Canada had signalled concern over rising short‑term rates as market participants adjusted to higher inflation expectations. The current step builds on those earlier warnings and follows a pattern of using repo operations to fine‑tune liquidity, a practice the bank has employed during previous periods of market stress.
Key facts
- The Bank of Canada is increasing the size of its two‑week repo operations to ease upward pressure on CORRA. (financialpost.com)
- Deputy governor Toni Gravelle said the central bank cannot tolerate excessive upward pressure on CORRA. (financialpost.com)
Sources
- [1] financialpost.com — originally reported as “Bank of Canada boosts two-week repo use to ease CORRA strain”
