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Changes in Minimum Bank of Canada Nominal Bond Purchases at Auctions

In light of the effect on its balance sheet of the extraordinary transactions being undertaken to provide term liquidity, the Bank of Canada is adjusting its purchase of nominal bonds at auctions. This will gradually bring its holdings of Government of Canada securities in line with the composition of the government's debt, consistent with the Bank of Canada's policy for the management of its balance sheet. 1

The increase in the Bank's assets from term PRA and term lending is being partly offset by reducing the Bank's holdings of treasury bills. This has caused the Bank's ratio of treasury bill holdings to bond holdings to be below that of the structure of Government of Canada market debt. As a result, the Bank will reduce its participation at auctions of nominal 2-year, 5-year, 10-year, and 30-year bonds to 10% for those securities in which the Bank holds less than 10% of the amount outstanding; otherwise, the Bank will decrease its participation to zero. These changes, effective immediately, are for balance-sheet purposes only and have no implications for monetary policy.

The Bank will continue to indicate its minimum purchase intentions on the Call for Tenders for each nominal bond offering. The Bank's maturing nominal bond holdings, if any, will also be published.

For further information contact:

Jill Vardy
Media Relations
Bank of Canada
613 782-8782

Content Type(s): Press, Market notices
  1. 1. Section 5.1 of the "Statement of Policy Governing the Acquisition and Management of Financial Assets for the Bank of Canada's Balance Sheet" states that "The Bank's holdings of Government of Canada nominal bonds and treasury bills are structured to broadly reflect the composition of the federal government's stock of nominal domestic marketable debt."[]