(November 28 – 17:05 ET) – The Bank of Canada says it is temporarily adding assets to its balance sheet to offset the anticipated $2 billion to $3 billion seasonal increase in the demand for bank notes.

Beginning in early December, the central bank will offer special purchase and resale agreements (SPRAs) for a term extending into the new year. The term SPRAs will be offered at the midpoint of the bank’s operating band for the overnight rate of interest, and these transactions would be collateralized with Government of Canada securities or bankers’ acceptances.

Depending upon the amount of term SPRAs arranged, the bank may also supplement its balance sheet needs by direct purchases of one-month bankers’ acceptances during the same period. These transactions would be undertaken through primary dealers for Government of Canada treasury bills.

The bank says these operations will be managed with attention to market conditions and prudent risk management. They do not have any monetary policy significance.

The total amount of term SPRAs transacted and bankers’ acceptances purchased on any day will be announced on the bank’s Web site by 16:45 ET.
-IE Staff