The move
reflects "the continued improvement in the functioning of short-term
funding markets and financial markets more generally,” according to the
announcement.
The last
operation for the Provincial
Money Market Purchase program will be 13 November 2020.
Under the
PMMP, the Bank of Canada would purchase up to a set percentage of short-term
debt (maturity less than 12 months) offered by any Canadian province. The program began in March 2020 with a
maximum purchase of 40%. The Bank of
Canada revised the limit to 20%
in July and 10%
in September.
The Bank
introduced a similar program to purchase provincial
bonds in May. Under the Provincial
Bond Purchase Program, the Bank of Canada will purchase up to 20% of an issuing province’s “eligible assets
outstanding” on the secondary bond market.
“The Bank’s
purchases will aim to reflect a reference portfolio based in equal weight on
each province or territory’s share of eligible bonds outstanding and their share
of Canadian GDP.”
“Each
issuer’s eligible share will be recalculated on a monthly basis. Actual
purchases will depend on what is offered through the tender offer process and
may differ from the reference portfolio.”
“The program
will hold up to a total of $50 billion par value of eligible assets.”
The PBPP
will end on May 6, 2021.
-srbp-
