KEY POINTS:
The Reserve Bank is to accept an even wider range of securities in its domestic liquidity operations, citing concerns about funding to business.
"Following a number of similar measures adopted earlier in the year, we are taking these steps to further enhance system liquidity and ease some of the current pressures on corporate sector funding," deputy governor Grant Spencer said.
The central bank was not lending directly to the corporate sector, he said.
"However, corporate debt will become more liquid and therefore a more attractive investment prospect for banks and portfolio managers," he said.
The new measures, most of which will take effect from December 17, include extension of the range of securities eligible for acceptance in the Reserve Bank's domestic liquidity operations.
Securities guaranteed by the New Zealand government, and New Zealand corporate securities denominated in New Zealand dollars, with a long term credit rating of BBB minus or better, will be eligible.
Short term securities with a credit rating of A2, F2, P2 or better are also eligible as are New Zealand dollar denominated asset backed securities rated AAA, A1 plus, F1 plus or P1.
Mr Spencer said the measures had no implications for the Reserve Bank's monetary policy stance.
- NZPA
