BKBM and the 90-day bank bill

What is BKBM?

BKBM is the Bank Bill Benchmark Rate: the wholesale rate at which New Zealand banks lend to each other for one to three months, fixed each trading morning. The 90-day fixing is the one most corporate facilities are priced off.

What is the BKBM rate today?

The current fixings are in the table above, updated every trading day. The 90-day rate is the one a floating corporate facility resets against each quarter.

How does BKBM affect what my company pays?

Your all-in cost on a floating facility is BKBM plus your credit margin. When the bill moves, the base cost of every floating facility in the country moves with it — before anything changes about your own credit. The margin is the part that is about you.

What is the difference between BKBM and the OCR?

The OCR is the Reserve Bank's policy setting; BKBM is a traded wholesale rate. BKBM normally sits a little above the OCR and moves ahead of it, because it prices in what the market expects the Reserve Bank to do next rather than only what it has done.

Is BKBM the same as the swap rate?

No. BKBM is the floating rate at the short end, out to three months. A swap rate is the fixed rate for a whole term — one year to fifteen. A floating facility prices off the bill; a fixed one prices off the swap at its tenor.