Bank of Canada Starts to Unwind Crisis Measures

BMO

Benjamin Reitzes, Director, Canadian Rates & Macro Strategist

October 16th, 2020

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• On Thursday, the Bank of Canada announced it is terminating some of the market support programs put in place at the height of the crisis in March. The Bankers’ Acceptance Purchase Facility (BAPF) and Canada Mortgage Bond Purchase Program (CMBP) are both being discontinued with the final operations coming the week of October 26. In addition, the term repo operations are being cut to every other week (from weekly) and eligible collateral are being tightened as well to include only C$ securities issued/guaranteed by the Government of Canada, Canadian provinces and those eligible for the Standing Liquidity Facility. Own-name covered bonds, own-name Term ABS and own-name ABCP will no longer be eligible.

  The BAPF has had zero take up since May, leaving no market impact. Similarly the term repo operations have seen very limited usage, so there should be no impact here either.