(August 14 – 16:20 ET) – The Bank of Canada says that consultations with market players revealed that they are in favour of implementing a cash management buyback program. However, the market doesn’t want the bank to change the maturity dates for two-year bonds.
The bank says that its consultations with the market elicited “generally favourable” comments to the possibility of implementing a buyback program targeting large outstanding bonds with less than 12 months to maturity. “The Bank of Canada and the Department of Finance are continuing to review issues related to the operations of such a program,” it says.
However the market was not so receptive to the idea of reverting back to March and September maturity dates for two-year bonds. “The balance of opinion among market participants was in favour of maintaining two-year bond issuance on the June and December maturity pattern,” it says. As a result, no change will be made to the two-year bond program.
The Bank says it remains “committed to continued consultations with market participants regarding potential future adjustments to its domestic debt programs which may be required to address issues such as market liquidity and government cash management”.
-IE Staff