The Bank’s Overnight Reverse Repo (ORR) operations help reinforce the Bank’s target for the overnight rate in a floor system with large settlement balances. ORR operations support the effective implementation of monetary policy by withdrawing liquidity to counteract downward pressure on overnight repo rates. The Canadian Overnight Repo Rate Average (CORRA) has in recent weeks been setting a few basis points above the Bank of Canada’s policy rate target. Hence, effective Friday, October 27, 2023, the ORR operation will be conducted on an ad-hoc basis and only when broad overnight general collateral funding conditions warrant. Previously, ORR operations were conducted on a daily basis. Additionally, the timing of the ORR operations, when conducted, will change from 10:30 (ET) to 11:45 (ET) with a deadline of 12 noon for participants to submit tenders. This new timing aligns with the timing of the Overnight Repo (OR) operations and leaves more time for transactions to take place among market participants before the Bank determines whether conditions warrant an injection or withdrawal of liquidity via ORs or ORRs. There is no change to counterparty limits.
These changes are of an operational nature and do not indicate a change in monetary policy. The Terms and Conditions of the ORR provide further operational details.
The Bank will monitor these operations and market developments. At its discretion, the Bank will adjust operation parameters and consider other measures, as warranted, to support its monetary policy objectives in a floor system while promoting market well-functioning.
Director
Financial Markets Department
613‑782‑7245
Director
Financial Markets Department
613‑782‑7723
Source(s):
Overnight reverse repo operations