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The Reserve Bank of Australia has injected an unusually large amount of cash into the financial system as panic selling across global markets driven by the coronavirus threatened to drain liquidity and push up borrowing costs.

In its daily money market operation the central bank pumped $8.8 billion into the system through repurchase agreements, well above the estimated requirement of $3.4 billion.

The money was leant for periods ranging from 17 to 95 days, with $5.6 billion going at the longest date.

Reserves held by the RBA for financial institutions have been rising steadily for several days amid a general hunt for liquidity by banks globally.

“There’s definitely strains in the market, and the RBA has acted to add extra liquidity to offset that,” said Martin Whetton, head of bond and rates strategy at CBA.

The US Federal Reserve on Thursday surprised by injecting $500 billion into the banking system there, and intends to add a further $1 trillion on Friday.

Earlier in the week, RBA Deputy Governor Guy Debelle said the bank had not seen much stress in the market, but that was before the latest plunge in global equities.

Australia’s main stock index was down seven per cent on Friday, bringing losses for the week so far to an eye-watering 20 per cent.