08 December 2022
Martin Taylor
[FYI request #20994 email]
Dear Martin
Thank you for your request made under the Official Information Act 1982 (OIA) on 31 October
2022 to the Reserve Bank of New Zealand – Te Pūtea Matua, as follows:
Further to the RBNZ media release of 9 June 2022 headed "Reserve Bank details planned
sales of New Zealand Government Bonds"**, please provide detailed accounting entries to
show how this process works. In particular:
1) Please provide the annotated accounting entries on the RBNZ, Treasury and any
other relevant balance sheets for a representative RBNZ sales transaction
2) Please provide the annotated balance sheet entries for the Treasury's funding for
purchases under this programme
3)
Please explain, with annotated balance sheet entries, the process of retiring
bonds, described here: "Bonds that NZDM repurchase from the Reserve Bank will
be retired.
On 9 November 2022 I emailed you seeking clarification on your request and informing you
that RBNZ could only provide you with RBNZ’s information , and could not provide you with
information that pertained to the Treasury. This was in regard to questions number 1 and 2
where you refer to Treasury balance sheets. I also sought clarification on question 3, about
whether you were referring to bond maturities, which you confirmed.
Response
Please find below three il ustrative entries in RBNZ’s ledger from both an LSAP bond close-
out and an LSAP bond maturity, as requested in questions 1 and 3:
1. Please provide the annotated accounting entries on the RBNZ, Treasury and any other
relevant balance sheets for a representative RBNZ sales transaction.
The below represent entries in RBNZ’s ledger when a bond is closed out directly with The
Treasury prior to maturity, in the instance where a premium was paid on the bond at
purchase and a loss is realised on sale.
Balance Sheet (net nil entries between BS accounts)
Cr Bond Principal
Cr Unamortised Bond Premium
Ref #9945803 v1.0
2
Dr Fair Value Adjustment
Cr Accrued Interest
Dr Crown Settlement Account (NZ Government Deposits)
Profit and Loss (net nil entries between P&L accounts)
Dr Realised Losses
Cr Unrealised Losses
General information on RBNZ’s balance sheets is also available on our website at:
Our
balance sheet (R1) - Reserve Bank of New Zealand - Te Pūtea Matua (rbnz.govt.nz).
2. Please provide the annotated balance sheet entries for the Treasury's funding for
purchases under this programme
We contacted Treasury in an attempt to transfer part of your request to them, as discussed
in our email exchanges of 9 and 10 November. Unfortunately they refused our transfer as
they do not have any specific data on the sales transactions referred to in these questions.
We are therefore refusing this part of your request under section 18(e) of the OIA, as the
document al eged to contain the information requested does not exist.
3. Please explain, with annotated balance sheet entries, the process of retiring bonds,
described here: "Bonds that NZDM repurchase from the Reserve Bank wil be retired".
The below represent entries in RBNZ’s ledger when a bond matures (e.g. in April 2023)
Note that the “Unamortised Bond Premium” wil have already amortised to nil upon
maturity. Also, the “Fair Value Adjustment” balances wil have also decayed to nil.
Balance Sheet
Cr Bond Principal
Cr Accrued Interest
Dr Crown Settlement Account (NZ Government Deposits)
No additional P&L entries are posted upon maturity.
You will find more information on the planned sales of government bonds on our website
at:
https://www.rbnz.govt.nz/hub/domestic-markets-media-releases/reserve-bank-
details-planned-sales-of-new-zealand-government-bonds. There is also a description
around the LDAP sales and the MOU with the NZDM available at:
https://www.rbnz.govt.nz/regulation-and-supervision/cross-sector-oversight/our-
relationship-with-other-financial-regulators/our-memoranda-of-understanding/terms-
of-sales-of-new-zealand-
3
You have the right to seek an investigation and review of this response by the Ombudsman, in
accordance with section 28(3) of the OIA. The relevant details can be found on the
Ombudsman’s website at
www.ombudsman.parliament.nz.
Please note that we intend to publish a copy of this response on the RBNZ website:
www.rbnz.govt.nz/research-and-publications/official-information-requests. Responses to
requests are published in order to improve public transparency and provide an additional
resource for anyone seeking information.
Yours sincerely
Janeca Miranda
Senior Advisor, Government and Industry Relations
Reserve Bank of New Zealand – Te Pūtea Matua
