TREE NEWS update: Bank of Canada Deputy Governor Toni Gravelle said the central bank is increasing the size of its regular two-week repo operations to relieve upward pressure on Corra, the Canadian Overnight Repo Rate Average, which measures the cost of overnight funding against Government of Canada T-bills and bonds as collateral. Gravelle also said the bank will launch the Canadian Collateral Management Service in the first quarter of 2027 to automate parts of repo transactions and reduce inefficiencies.
Bank of Canada Scales Up Two-Week Repo Operations to Ease Corra Pressure
AI take
The Bank of Canada is responding to a funding-cost problem in its own backyard: Corra pressure signals that collateral is not moving efficiently through the repo market, and enlarging the two-week operations is a liquidity backstop rather than a policy shift. The longer-term signal is the collateral management service, which points to infrastructure, not rates, as the diagnosed bottleneck. Whether Corra pressure is transient or structural is the open question, and the 2027 automation timeline suggests the bank expects the inefficiency to persist.
Generated by AI for reference only.
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