In accordance with the 14 October 2008 announcement of new measures to provide liquidity to the Canadian financial system, the Bank of Canada announced today that it will enter into a 14-day term purchase and resale agreement (PRA) facility for private sector money market instruments as follows:

Amount Auction Date Settlement Date Maturity Date
$1 billion 27 October 2008 29 October 2008 12 November 2008

The minimum bid rate will be announced on the Bank's web site ahead of the auction. It will be calculated as a spread of 75 bps over the average of the Bank of Canada's overnight rate target and the 1-month OIS rate at 9:00 (ET) on 27 October as observed by the Bank.

The auction will be held on 27 October at 9:30 (ET) and the results of these operations will be announced on the Bank's web site at 10:30 (ET). Primary Dealers must notify the Bank of Canada of the securities that will be used in the transactions, both by themselves and by their indirect bidders, by 12:00 (ET) on the day of the auction.

The total amount of assets acquired through these term PRA operations will be announced on the Bank's web site on the settlement day by 16:45 (ET). The assets will also be reported on the Bank of Canada's balance sheet.

Further detail for this operation, including the eligible securities, are available in the Terms and Conditions of the Term PRA Facility for Private Sector Money Market Instruments.

The Bank will continue to provide additional term liquidity as long as conditions in financial markets warrant.

For further information, please contact:
Jeremy Harrison
613 782-8782