The Reserve Bank has pulled some of the emergency liquidity measures it put in place at the height of the Covid-19 pandemic in New Zealand.
Photo: 123RF
In March last year, the central bank introduced a Term Auction Facility, which allowed banks to borrow funds for up to 12 months using a broad range of collateral.
It also later added a weekly Corporate Open Market Operation, which provided a channel for banks to borrow funds to continue funding corporate clients.
"Financial market conditions have improved significantly since March 2020 when these facilities were introduced and the usage of these special facilities has been very low in the last six months," the bank's head of financial markets Vanessa Rayner said.
The measures were intended to be temporary and the RBNZ said their removal have no implications for its monetary policy stance.
In total, close to $1.3 billion dollars of funds were accessed via the Term Auction Facility, the largest sums in the early days of the facility's operation.
Rayner said liquidity in the system had been boosted by other measures, such as the Large Scale Asset Purchase, Term Lending Facility and Funding for Lending programmes.
The last time the Term Auction Facility was used was between 2008 and 2010, during the global financial crisis.
"The Reserve Bank will continue to monitor market conditions closely and is in a position to supply liquidity as required via its daily Open Market Operations or the reinstatement of these special facilities in the future if needed," Rayner said.