Australia's central bank injects $7.65b into banking system to keep liquidity ample

Pedestrians walk past the main entrance to the Reserve Bank of Australia head office in Sydney on Oct 3, 2016. PHOTO: REUTERS

SYDNEY (REUTERS) - The Reserve Bank of Australia (RBA) injected extra cash into the financial system on Tuesday (March 17)as steep falls in global equity markets driven by concerns about the coronavirus threatened to drain liquidity and push up borrowing costs.

In its daily money market operation the Reserve Bank of Australia (RBA) pumped A$8.8 billion (S$7.65 billion) into the system through regular repurchase agreements, well above its original intention of A$2.06 billion.

Tuesday's operations ranged from 6 days to 181 days, with A$4 billion going at the longest maturity.

On Monday, the RBA said it was ready to purchase local government bonds in the secondary market and would announce further policy measures on Thursday.

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