RBA Ample Reserves: Open Repo Ends and ADI Liquidity Gets Active

ByRegReportingDesk

On 25 August 2026, the Reserve Bank of Australia set out how far along it is on what it calls the road to ample. In a Sydney speech, the RBA’s Head of Domestic Markets, David Jacobs, described the central bank’s transition to an RBA ample reserves framework, a demand-driven regime for supplying the Exchange Settlement (ES) balances that banks use to settle payments with each other. The same speech announced that one standing facility, open repo, will close from early 2027.

For authorised deposit-taking institutions (ADIs), this is a shift in the plumbing beneath their liquidity books, not a new reporting return. APRA’s Prudential Standard APS 210 Liquidity and Reporting Standard ARS 210.0 Liquidity are untouched by the speech. What changes is the environment those returns measure. The pool of system reserves is shrinking; as the system approaches ample, the RBA expects OMOs to become the key marginal source of reserves and money market rates to become more variable. Those developments can affect the liquidity data an ADI reports under the LCR or MLH regime that applies to it.

The RBA is explicit that none of this bears on the stance of monetary policy; the cash rate target is still set in the normal way by the Monetary Policy Board. The change is operational, and it lands on the treasury and regulatory-reporting teams that manage liquidity day to day. Getting ready is mostly a data and process job, not a new template.

Related reading: APRA’s APS 210 treatment of settlement-service-provider deposits

What the RBA announced on 25 August 2026

The speech, titled The Road to Ample, did three things. It gave the RBA’s assessment of how close the banking system is to demand-driven reserves. It set out how the operational framework is meant to deliver a smooth transition. And it confirmed one concrete decision: the open repo facility is no longer needed and will cease from early 2027.

The headline judgement is that Australia is not yet at ample reserves. System reserves still reflect the assets the RBA bought during the pandemic more than the underlying demand of the banking system. The RBA watches two signals to gauge when the system is getting close, and neither has yet turned.

The operative dates for a reporting team to track are few:

  • 2024: the Reserve Bank Board chose an ample reserves approach over a return to the pre-pandemic scarce-reserves system.
  • 2025: the RBA published the detailed design, including the spread of the OMO rate over the ES rate, and raised the cost of obtaining reserves through OMOs.
  • 2 April 2025: the RBA and APRA issued a joint statement that using the RBA’s overnight standing facility is consistent with routine liquidity management.
  • 25 August 2026: the RBA put ample reserves demand at around $70 to $100 billion and announced the closure of open repo.
  • Early 2027: the open repo facility ceases, with the RBA saying it will communicate more with market participants in the coming months.

From pandemic surplus to ample reserves

During the pandemic, the RBA’s bond purchases and term funding operations injected close to $500 billion of ES balances into the banking system. With reserves that abundant, banks had little need to borrow from one another or to use the RBA’s regular liquidity operations, and the rate paid on reserves, the ES rate, anchored short-term interest rates. Reserves have since fallen by more than half as those pandemic-era assets have matured, and the RBA expects the decline to continue.

The regime the RBA is moving to supplies as many reserves as the banking system demands through regular full-allotment OMOs, priced at a modest spread over the ES rate. The RBA sets the ES rate 10 basis points below the cash rate target and the OMO rate 10 basis points above it, so the cost of holding reserves and the cost of obtaining them both sit close to the target. The RBA does not push reserves into the system beyond what is demanded at that price.

That is the mechanical heart of a demand-driven framework. As the RBA’s bond holdings keep maturing, system reserves fall by an estimated $20 to $40 billion a year. Once reserves reach underlying demand, banks are expected to replace the drained balances with reserves obtained at OMOs, which holds the overall level steady. Control of the quantity of reserves passes from the RBA’s balance-sheet decisions to the demand of the banking system.

The RBA’s own read: reserves are still above demand

The RBA surveys banks on the reserves they expect to hold once the system reaches ample. In 2024 those responses implied ample reserves of around $100 to $200 billion. By the August 2026 speech the estimate had fallen to around $70 to $100 billion, well below the current level of reserves. Banks have grown comfortable holding high-quality liquid securities in place of reserves, confident they can turn them into cash in private markets or at the RBA’s facilities.

Two market signals tell the RBA the system is not yet demand-driven. Reserves can still be sourced a little more cheaply in short-term repo markets than from the RBA, and use of the full-allotment OMOs remains modest even as more counterparties take part. Until those signals turn, the level of reserves is being set by the run-off of pandemic assets rather than by demand.

Treating ample as a number the RBA is steering towards would be a misreading. The RBA frames it the other way around. Ample describes a system that supplies whatever quantity the banking system demands while keeping the cash rate near target, and it does not aim at a fixed reserve level. That is why the fall in reserves has so far produced little reaction in either market prices or OMO usage. For a reporting team, the practical consequence is blunt: there is no official reserve target to plan a liquidity book around, so the planning anchor has to be the institution’s own demand.

Where the shift lands in APRA liquidity returns

APRA collects ADI liquidity data under Reporting Standard ARS 210.0 Liquidity, which sits beneath Prudential Standard APS 210 Liquidity, in force from 1 July 2025. Under ARS 210.0, locally incorporated LCR ADIs report ARF 210.1A (Liquidity Coverage Ratio, all currencies), ARF 210.1B (Liquidity Coverage Ratio, AUD only), ARF 210.3.1 (Contractual Maturity Mismatch, Funded Assets), ARF 210.3.2 (Contractual Maturity Mismatch, Funding Liabilities and Capital), ARF 210.4 3-year Funding Plan, ARF 210.5 Daily Liquidity Report when APRA requests it, and ARF 210.6 Net Stable Funding Ratio. Foreign LCR ADIs report the same forms except ARF 210.6, which is only completed by locally incorporated LCR ADIs. MLH ADIs report ARF 210.2 Minimum Liquidity Holdings Ratio, ARF 210.3.1, ARF 210.3.2, ARF 210.4 and ARF 210.5 when APRA requests it. Following a request, APRA specifies the consecutive business days, duration or other reporting frequency. The RBA speech changes none of these forms. What it changes is the composition of what flows into them.

The RBA describes ES balances as the most liquid asset available; under APS 210, central bank balances qualify as HQLA1 to the extent that they may be drawn down in times of stress. They settle across the RBA’s real-time gross settlement system, the subject of the RBA’s 2026 RITS assessment of settlement access. At system level, the RBA shows central bank balances declining while banks’ holdings of Australian Government Securities and semi-government securities have risen; an individual ADI’s HQLA mix depends on its own liquidity management. The LCR is a ratio of unencumbered HQLA to net cash outflows over a 30-day stress, so a shift out of reserves and into government paper changes the make-up of the HQLA numerator without necessarily moving the ratio. The change a supervisor can read in the return is that shift in composition.

Scope decides which return carries the story. The RBA’s April 2025 Financial Stability Review describes the LCR cohort as the 13 largest and most complex banks and other banks as subject to MLH. The governing APS 210 classification rule is that APRA determines whether each locally incorporated ADI is an LCR ADI or MLH ADI, while a foreign ADI is an LCR ADI unless APRA determines it to be an MLH ADI. An MLH ADI must maintain at least 9 per cent of its liabilities in specified liquid assets. MLH banks can count certain bank debt securities as liquid assets, a concentration the RBA has flagged as one the sector needs to watch in a stress. The demand-driven shift touches both cohorts, through different returns and at different levels of detail.

APRA does keep the framework current through its rolling minor updates to the prudential and reporting framework, but those are technical clarifications rather than a response to the reserves shift. The more instructive precedent sits a few years back. The Committed Liquidity Facility, which once let LCR banks cover a shortage of government paper with an RBA commitment, was phased out to zero on 1 January 2023. APRA reduced the aggregate CLF for locally incorporated LCR ADIs to zero from 1 January 2023; LCR requirements otherwise continue to be governed by APS 210, including its HQLA and alternative-liquid-asset provisions. A shrinking pool of ES balances raises the question the CLF’s removal did: is there enough government collateral in the system, and can an ADI actually source it. The RBA says OMO-eligible collateral has roughly doubled and the private repo market has deepened, supporting the capacity of OMOs to scale. That statement concerns collateral eligible for RBA operations; it should not be read as a finding that every ADI has sufficient HQLA available to source.

Open repo closes, and the standing facilities stay open

Open repo was introduced in 2013 to work around the constraints of the scarce-reserves system. It gave banks an extra, zero-cost source of the minimum reserves they needed for smooth after-hours payments, at a time when the RBA estimated banks needed around $20 to $30 billion for that purpose against a reserves supply of about $1 billion. Open repos are drawn in advance, have no set maturity date, and carry interest at the ES rate, so a bank pays no opportunity cost to hold them.

Under a full-allotment framework, banks can obtain as many reserves as they need at OMOs, so the RBA has concluded that open repo is no longer needed. Use had already dropped below $5 billion, much of it by banks that do not take part in after-hours settlement. The RBA has decided the facility will cease from early 2027, while keeping the option to bring it back if a clear need returns.

Closing open repo does not remove the minimum ES-balance requirement for RITS members that settle after-hours transactions across their own Exchange Settlement Account through the Fast Settlement Service or Low Value Settlement Service. The RBA says it will review the size of those requirements in the coming months, with new recommended amounts to take effect when open repo is discontinued. Overnight and intraday standing facilities remain available on prespecified terms to Eligible Counterparties that settle payments across their own ES account, subject to applicable conditions.

This is where an old habit can mislead a treasury desk. The RBA said in April 2025 that market participants had historically been reluctant to use the overnight standing facility, and it has since worked with APRA to normalise use as part of routine liquidity management. The RBA and APRA addressed it head-on in their 2 April 2025 joint statement, which treats use of the overnight facility as routine liquidity management. The joint statement says use of the overnight standing facility is consistent with routine liquidity management and that the RBA and APRA are comfortable with banks using it as needed; the RBA’s August 2026 speech says usage has since increased.

Active liquidity management is back on the desk

The clearest message for market participants is that liquidity management is about to become more hands-on. As reserves approach demand, the RBA says money market rates are likely to become more variable, particularly between weekly OMOs, and that variation should provide useful signals. The RBA points to the United Kingdom, New Zealand and Canada, which saw the same pattern as they moved to similar systems.

The RBA’s advice to counterparties is concrete: monitor and forecast liquidity needs, be ready to source liquidity in money markets and to lend it on to others, keep counterparty limits calibrated for a more active market, and test the RBA’s facilities regularly rather than only in a crisis. Demand for reserves will also keep evolving with payments innovation, including the RBA’s account-to-account payments vision, with liquidity regulation and the shape of the yield curve pulling in their own directions.

More variable rates and more active positioning may change the underlying liquidity data feeding ARS 210.0 returns. Under ARS 210.0, ARF 210.1A and ARF 210.1B and ARF 210.3.1 and ARF 210.3.2 are ordinarily quarterly; ARF 210.5 is submitted only when APRA requests it, at the duration or frequency specified by APRA. An ADI that has run a placid, reserve-rich book through the pandemic years may find its liquidity metrics moving around more from one reporting date to the next. That is a data-quality and forecasting problem before it is a compliance one, and it repays rehearsing the reporting process against a more volatile set of inputs now.

How Australia’s ample differs from the Fed’s version

The word ample is doing different work in different jurisdictions, and it is easy to import assumptions from the wrong one. The US Federal Reserve runs an ample reserves framework in which the central bank determines the quantity of reserves through its own operations. Australia’s version is demand-driven: the banking system sets the quantity through full-allotment OMOs, and the RBA supplies to meet that demand. The RBA groups its approach with the European Central Bank, the Bank of England and the Reserve Bank of New Zealand rather than with the Fed.

The distinction matters for anyone benchmarking Australian liquidity behaviour against an offshore parent or peers. A reserves level that looks low against United States norms can be entirely consistent with the Australian framework, where the RBA notes that underlying demand sits towards the lower end of the international range.

To keep OMOs from growing so large that they lock up collateral or strain the repo market, the RBA has a set of complementary tools it can deploy to supply a relatively stable quantity of reserves: foreign exchange swaps, cross-currency basis swaps and purchases of short-term Australian Government Securities. Most were routine before the pandemic. The RBA would use them as a price-taker, keeping OMOs as the marginal source of liquidity, and would probably start with FX or cross-currency swaps if any support were needed at all. This is context for why the RBA is confident the framework can flex to whatever level of demand eventually emerges.

Frequently Asked Questions

Does the closure of open repo change any APRA reporting form or deadline?

No. Open repo is an RBA liquidity facility, not an APRA collection. The ARS 210.0 forms and their due dates are set by APRA and are not affected by the RBA’s decision to cease open repo. What an ADI may see is a change in how it sources the minimum ES balances it holds for after-hours payments, which is an operational matter rather than a reporting-standard change.

If an ADI draws more heavily on OMOs, how does that interact with its HQLA?

An OMO is a repo: the ADI receives ES balances against eligible collateral. For LCR reporting, this should not be reduced to a simple ‘collateral out, ES balance in’ rule. APS 210 requires HQLA to meet its operational requirements, including being unencumbered, but its LCR calculation also requires specified short-term secured funding transactions to be reflected in adjusted HQLA and applies secured-funding run-off rates according to collateral type. ARF 210.1A and ARF 210.1B contain the corresponding secured-funding and HQLA adjustment fields. The treatment therefore depends on the collateral, maturity and applicable APS 210 and ARS 210.0 calculation rules.

Are foreign ADI branches affected in the same way as locally incorporated banks?

Under APS 210, a foreign ADI is an LCR ADI unless APRA determines it to be an MLH ADI. For locally incorporated ADIs, APRA determines the LCR or MLH classification. The applicable ARS 210.0 forms then follow that classification and reporting basis; any change in an individual ADI’s HQLA composition depends on its own liquidity position and management.

When will the system actually reach ample, and should teams wait for a date?

The RBA says the timing is highly uncertain and could be some years away, or earlier if banks lift their demand or market frictions appear. The framework is deliberately built so that a smooth transition does not depend on knowing the date. For a reporting function, that argues against waiting: the inputs start moving well before any announced arrival at ample.

If private markets tighten, can an ADI still rely on the RBA for liquidity?

Eligible Counterparties that meet the RBA’s standing-facility conditions can use its overnight and intraday facilities, and the RBA expects usage to rise as reserves fall. The 2 April 2025 joint statement says use of the overnight standing facility by banks is consistent with routine liquidity management and that the RBA and APRA are comfortable with banks using it as needed. Exceptional Liquidity Assistance is separate and is available only in exceptionally rare circumstances at the RBA’s discretion.

Does a lower level of system reserves mean the banking system is less liquid?

Not on the RBA’s reading. Reserves are shifting into Australian Government and semi-government securities rather than disappearing, and the RBA’s April 2025 Financial Stability Review reported bank liquidity ratios above pre-pandemic levels and well above regulatory minimums. The RBA’s April 2025 review reports aggregate bank liquidity ratios above pre-pandemic levels and well above regulatory requirements, while the August 2026 speech shows a system-level shift in HQLA composition; neither source establishes that every ADI’s buffer size is unchanged.

Key Takeaways

  • The RBA is moving to a demand-driven ample reserves framework and, on 25 August 2026, judged that Australia is not yet at ample, with demand estimated at around $70 to $100 billion.
  • The open repo facility ceases from early 2027; the minimum ES-balance requirement for RITS members settling after-hours transactions stays in place, with the RBA to review the size of those requirements in the coming months.
  • The speech changes no APS 210 or ARS 210.0 requirement. Under current ARS 210.0, locally incorporated LCR ADIs report ARF 210.1A, ARF 210.1B, ARF 210.3.1, ARF 210.3.2, ARF 210.4 and ARF 210.6, and can be required by APRA to submit ARF 210.5. Foreign LCR ADIs report the same forms except ARF 210.6. MLH ADIs report ARF 210.2, ARF 210.3.1, ARF 210.3.2 and ARF 210.4, and can be required by APRA to submit ARF 210.5. Subject to APRA’s power to vary reporting periods, ARF 210.1A, ARF 210.1B, ARF 210.2, ARF 210.3.1, ARF 210.3.2 and ARF 210.6 are quarterly and due within 35 calendar days after quarter-end; ARF 210.4 is annual and due within 35 calendar days after financial year-end. ARF 210.5 is request-driven: the first return is due by close of business on the request day using previous-day close data, except where the request is received after 12 pm, when it is due by close of business the next business day using data as at the request date; it then continues daily for the number of consecutive business days, or for another duration or reporting frequency, specified by APRA.
  • The RBA estimates that maturing bond holdings will reduce system reserves by about $20 to $40 billion a year until demand-driven replacement through OMOs offsets the drain. At system level, lower central bank balances have been accompanied by higher holdings of Australian Government and semi-government securities; individual ADI HQLA mixes will vary.
  • The RBA’s April 2025 Financial Stability Review describes the LCR population as the 13 largest and most complex banks and other banks as subject to MLH. Under the governing APS 210 rule, APRA determines the LCR or MLH classification of locally incorporated ADIs, while a foreign ADI is an LCR ADI unless APRA determines it to be an MLH ADI. MLH ADIs must maintain at least 9 per cent of liabilities in specified liquid assets.
  • Using the RBA’s overnight standing facility is routine liquidity management under the RBA and APRA joint statement of 2 April 2025.
  • Expect more variable money market rates and more active liquidity management. Rehearse forecasting and reporting against a more volatile set of inputs before ample arrives.

Sources and References

What reporting teams should watch before early 2027

The road to ample is a slow-moving change with a fast-moving tail. For most ADIs, the next year or two is about data and habit: tracking how the ES-balance and government-securities lines move in the ARS 210.0 returns, keeping the LCR and MLH inputs clean as they grow more variable, and testing the RBA’s facilities so that using them is unremarkable when the time comes. The RBA speech itself does not amend APS 210 or ARS 210.0. Separately, APRA announced on 16 March 2026 that it intends to consult on liquidity-framework reforms for both LCR and MLH ADIs; those proposals are not yet binding, and implementation timing remains to be confirmed.

Open repo is due to be discontinued in early 2027, with the effective date still to be announced. Existing open-repo limits remain in place until then, but the RBA says that, with immediate effect, it will no longer accept requests to increase those limits. It will also review minimum ES-balance requirements for relevant after-hours settlement participants in the coming months.

Disclaimer: The information on RegReportingDesk.com is for educational and informational purposes only. It does not constitute legal, regulatory, tax, or compliance advice. Always consult your compliance officer, legal counsel, or the relevant supervisory authority for guidance specific to your institution.

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