The Reserve Bank of Australia’s first repo auction to provide US dollars has failed to generate any demand, with just A$50 million sold against a maximum amount of A$10 billion.
The outcome is unlikely to surprise the RBA because there was already an expectation that the local big banks have ample US dollar liquidity.
The RBA provided A$50 million at a cut-off rate of 0.34% which was also minimum bid rate and the weighted average rate. The term of the repos is 84 days.
The RBA had set minimum bid rate at 0.25% above the US dollar overnight index swap rate for the corresponding maturity.
The Australia dollar is currently trading around $0.59 versus $0.6007 Wednesday.
