BoC reduces minimum purchase amount of nominal bonds

The Bank of Canada is decreasing its minimum purchase amount of nominal bonds at auctions to 13% from the current 14% level, effective immediately.

In managing its balance sheet, the Bank of Canada acquires Government of Canada securities to offset its liabilities, which consist mainly of bank notes in circulation and deposits. The bank acquires these securities on a non-competitive basis at auctions, and structures its holdings to broadly reflect the composition of the federal government’s stock of nominal domestic marketable debt.

As outlined in its policy governing the acquisition and management of financial assets for its balance sheet, the central bank typically acquires a fixed percentage of the amount of nominal bonds being auctioned, with the amount of treasury bills purchased reflecting the BoC’s balance sheet needs at the time of each auction.

This change is for balance-sheet purposes only and has no implications for monetary policy, the bank said in release.

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