RBNZ to operate TAF to avert liquidity crunch

The Reserve Bank of New Zealand on Friday said it will follow the Federal Reserve's lead in establishing a Term Auction Facility (TAF) operation to enhance liquidity.

The Reserve Bank said the facility, which will be launched alongside a Reserve Bank bill tender, was "intended to support banking system liquidity at a time when offshore markets remain disrupted."

The TAF will offer NZ$2 billion ($1.18 billion) in three-, six- and 12-month loans every Wednesday morning against the Reserve Bank's