Bank of England assigns 37bn pounds in weekly repo

The Bank of England (BoE) assigned on Thursday 37.059 billion pounds ($49.52 billion) in seven-day funds in its weekly short-term repo, down from 44.523 billion pounds in last week’s repo.

Repos, or repurchase agreements, allow banks to borrow cash from the central bank using government bonds as collateral. The BoE has been using repos to manage liquidity in the financial system, particularly as it unwinds its quantitative easing programme.

Thursday’s result is the first decrease in weekly repo usage since August 29.

The BoE’s repo facility has seen increased demand in recent months, driven by the central bank’s efforts to unwind its quantitative easing programme. As the BoE reduces its bond holdings, it is withdrawing liquidity from the financial system, leading to higher demand for short-term funding through the repo facility.

Attribution: Reuters