Balance sheet operations for the reinvestment of proceeds of maturing Government of Canada bonds

As announced on October 27, 2021, the Bank of Canada is ending quantitative easing and moving into the reinvestment phase effective November 1, 2021. As previewed in the September Economic Progress Report, the Bank will now maintain its total stock of Government of Canada bond holdings roughly constant. The Bank’s purchases during the reinvestment phase will not match the maturities rolling off one-for-one because the maturities are large and unevenly spaced. The Bank will adjust its purchases to match maturities over a longer period, so that its purchases are not unduly volatile. The target range for total purchases will initially be between $4 billion and $5 billion per month and will be adjusted as necessary.

Primary market purchase amounts will be reduced to a total of between $1 billion and $2 billion per month. The monthly amount purchased will be adjusted as necessary. The Bank’s percentage participation at each auction may vary over time but will be roughly uniform across maturity sectors. The Bank will continue to indicate its minimum purchase amount on the Call for Tenders for each offering of bonds.

Total secondary market purchases will be reduced to a range of between $2.5 billion and $3.5 billion per month. The reduction will be made on a pro rata basis, with the proportional allocation across sectors unchanged. Given the smaller size of the operations, purchases will be of nominal bonds only: real return bond purchases will be discontinued. Operations will be spread across a two-week period rather than the current weekly basis. The schedule for the period November 1 to November 12 will be published Friday October 29. Following that, the schedule of operations will continue to be published on a bi-weekly basis, one week in advance. Further operational details about each secondary market operation, including the size, timing and the basket of eligible securities, will continue to be released at least one day ahead of each operation.

For further information, please contact:


Director
Financial Markets Department
Bank of Canada
613-782-7723


Director
Financial Markets Department
Bank of Canada
613-782-7245

Media Relations
Bank of Canada