Bank Of England: Confirmation Of Weekly Frequency For Indexed Long-Term Repo Operations - Market Notice 16 October 2024

In line with the Bank’s transition to a repo-led, demand driven operational framework for providing reserves, which Indexed Long-Term Repo operations are central to, this Market Notice confirms that these operations will continue to be offered weekly on a permanent basis. There will be an accompanying change to the maturity date structure of Indexed Long-Term Repo operations to ensure alignment with their weekly frequency.

Market Notice

The Bank of England (the Bank) has been offering Indexed Long-Term Repo (ILTR) operations weekly, on a temporary basis, since March 2019. Prior to this, ILTR operations were offered once a month. 

The Bank is today confirming that the ILTR, which offers reserves for a 6-month period against the full range of SMF-eligible collateral, will continue as a weekly operation on a permanent basis. 

The permanent instatement of the ILTR as a weekly facility reflects the Bank’s ongoing transition to a repo-led, demand-driven operational framework. Within this framework, the ILTR will play a key role in supplying the stock of reserves demanded by the system for monetary and financial stability reasons.  

From w/c 4 November 2024, the maturity structure of ILTR operations will be amended to reflect the weekly frequency of the operation. This means that the term of all ILTR drawings will now mature after exactly 6 months. Previously, all ILTR operations in a given month had the same single maturity date. 

The Bank’s Market Operations Guide has been updated to reflect this announcement. Participants should review the relevant settlement process information for ILTR operations. 

The updated schedule of operations is set out in Table 1 below. 

Further changes to ILTR calibration are being considered by the Bank as part of the transition to a repo-led demand-driven framework for supplying reserves. The Bank plans to seek views on this via a Discussion Paper which is due to be published later this year. Any further changes to the ILTR will be announced in due course.

Table 1: Schedule of Indexed Long-Term Repo operations

Other than as amended by this Market Notice, the Terms and Conditions and Operating Procedures for participation in the Bank’s Sterling Monetary Framework will continue to apply to ILTR operations.