The Treasury

Global Navigation

Personal tools

Liquidity Risk

Liquidity risk is defined as not being able to meet expected and unexpected cash flow needs. The objective of NZDMO's liquidity policy is to ensure that NZDMO can meet all cash obligations as they fall due. To manage liquidity risk in its foreign currency portfolios, liquid assets are required to be held in each currency to cover cash flow obligations over one-day, two-day and six-week intervals. For New Zealand-dollar liquidity risk, other liquidity policies apply, and NZDMO has established cash management arrangements with RBNZ to support effective management of overall Crown cash flows.

Liquidity Requirements

Liquidity Requirements
As at 30 June 2014 Contractual
Cash Flows
$m
0-12
Months
$m
1-2 Years
$m
2-5 Years
$m
5-10 Years
$m
> 10 Years
$m
Overdrafts and payables            
Crown disbursement account 5,174 5,174
Creditors and payables 136 136
Financial liabilities            
Treasury bills - market 3,220 3,220
Treasury bills - non-market 580 580
Government bonds - market 72,446 11,745 2,564 29,441 28,696
Government bonds - non-market 4,038 826 138 1,408 1,666
Inflation-indexed bonds - market 13,414 286 2,028 621 1,036 9,443
Inflation-indexed bonds - non-market 1,197 31 367 46 76 677
Kiwi bonds 187 124 45 18
Euro-commercial paper
Foreign currency debt 110 17 60 33
Collateral 887 887
Departmental deposits 75 75
IMF allocation 1,506 1,506
Immigration investor policy bonds
Other
Total non-derivative liabilities 102,970 24,607 5,202 31,567 31,474 10,120
Derivative inflows[18]            
Foreign exchange contracts 4,208 3,803 360 44 1
Cross-currency swaps 6,493 2,463 1,938 2,092
Interest-rate swaps 2,791 666 536 1,093 496
Total derivative inflows 13,492 6,932 2,834 3,229 497
Derivative outflows[18]            
Foreign exchange  contracts 4,090 3,709 338 42 1
Cross-currency swaps 5,819 2,172 1,837 1,810
Interest-rate swaps 2,729 618 511 1,093 506 1
Total derivative outflows 12,638 6,499 2,686 2,945 507 1

Notes

  • [18]Derivative flows include both derivatives in gain and derivatives in loss.
Page top