The Reserve Bank of Australia (RBA) is set to increase the rate on all new open market operation (OMO) repos by 5 basis points (bps) to 10 bps above the cash rate target, starting April 9, 2025, as announced by Assistant Governor Christopher Kent in a speech delivered on Wednesday. The OMOs will maintain a floating rate, and a new seven-day term will be introduced, complementing the existing 28-day term in the weekly auctions, which will continue to occur on Wednesday mornings. Kent highlighted that the transition towards maintaining ample reserves is still in progress, with reserve levels remaining high due to bond purchases during the pandemic. As the RBA's bond holdings decrease, reserves are anticipated to progressively decline until they align with the banks' demand. At that juncture, increased participation by banks in the OMO is expected to mitigate further reserve reductions. Should banks encounter unforeseen liquidity needs on days when OMO is not available or find themselves in need post-OMO without suitable private market liquidity, the RBA urges and anticipates that they will utilize its overnight standing facility (OSF).