Bank of England Boosts Cash Reserves in Long-Term Repo Operations

The Bank of England has increased cash reserves for weekly long-term repo operations from 25 billion to 35 billion pounds. This adjustment aligns with new lending parameters, expanding reserves to 840 billion pounds. The changes follow feedback on a December proposal.

On Wednesday, the Bank of England announced a significant increase in cash reserves available in its weekly long-term repo operations, raising the amount from 25 billion pounds to 35 billion pounds.

This adjustment is made in line with a new demand-driven framework for lending central bank reserves through the Indexed Long-Term Repo (ILTR), shifting towards a more repo-led approach.

The recalibration also increases the total cash stock available to 840 billion pounds and raises the reserves available at minimum clearing spreads from 5 billion to 8 billion pounds per auction.

(With inputs from agencies.)