For example, financial institutions might pass on the costs resulting from the negative interest rate policy to borrowers by raising lending rates for firms and homeowners. In order to avoid such unintended consequences, the Bank has adopted a multi-tier system in which current accounts held by financial institutions at the Bank are divided into three separate tiers.
This increase in system liquidity is coming through a number of channels: the RBA's daily market operations; drawings under the TFF; and the RBA's purchases of Australian Government bonds and semis. These policy actions are working as expected.