Bank of Canada Strengthens Repo Market Infrastructure

The Bank of Canada is strengthening its repo market infrastructure to improve resilience and efficiency. The bank is joining a tri-party platform operated by the TMX, known as the Canadian Collateral Management Service (CCMS), for its repo operations in the first quarter of 2027. This will make settling operations more efficient and easier to scale up when needed.

The Bank is also updating its implementation framework to better reflect evolving dynamics in repo markets since quantitative tightening ended last year. The bank targets a secured rate, the overnight repo rate, which makes it different from many other central banks that target an unsecured rate. Repo markets play a big role in how the bank implements monetary policy.

The Bank uses the Canadian Overnight Repo Rate Average (CORRA) to monitor conditions in repo markets and respond to funding pressures. Since quantitative tightening ended, CORRA has often been modestly above the target, prompting market participants to ask when the Bank decides to use its tools. The Bank tolerates some deviations in CORRA but will intervene if it gets too far from the target.

The bank made an important adjustment to its toolkit in October 2025 by adding two-week term repo operations. These weekly operations have become an effective complement to overnight repo operations and are used regularly to get ahead of expected or seasonal pressures around quarter-end reporting dates for Canadian banks or large government bond maturities.