mortgage - backed securities ( rmbs, graph 8 ). this is not surprising given a number of forces at work. first, with credit growth likely to remain low or even decline, their funding needs will remain modest for a time. second, they had issued quite a lot of bonds prior to the pandemic and have subsequently found themselves flush with other sources of funding, including low - cost deposits. while those sources do not have the same maturity profile as longer - term bonds, they lessen the need for near - term issuance. and third, they have the option of accessing funds from the tff at a cost of 25 basis points, while the cost of a newly issued bond of similar maturity is around 30 - 60 basis points ( based on secondary market prices in recent weeks ). graph 8 https : / / www. rba. gov. au / speeches / 2020 / sp - ag - 2020 - 07 - 27. html 10 / 14 27 / 07 / 2020 the reserve bank's operations – liquidity, market function and funding | speeches | rba other, smaller banks, have issued bonds over recent months. in part this reflects the fact that they haven't benefited to the same extent as the major banks from an influx of deposits. but in any case, their issuance is roughly offsetting maturities so in net terms issuance isn't increasing. similarly, mortgage originators have resumed issuance of rmbs over the past few months, following a pause in april. the aofm has supported this by purchasing rmbs directly at issuance, and in the secondary market ( with investors then recycling those funds into new primary issuance ). [ 10 ] spreads at issuance are a little higher than they were at the start of the year, but do not stand out when taking a slightly longer perspective ( graph 9 ). and yields are at low levels, driven by the fall in bbsw rates. graph 9 over the year to date, non - financial corporations have been issuing bonds to about the same extent as they have in recent years ( graph 10 ). after a period when markets were disrupted during the height of the market stresses in march, these firms have been able to issue bonds in good quantities and relatively favourable yields, which is welcome ( graph 11 ). the relatively low level of yields reflects the historically low level of risk - free rates, with 3 - year ags yields consistent with the board's target of around 25 basis

some weeks until that part of the portfolio reaches between us $ 3 – 4 billion. as is the case currently with short - term swaps conducted by the bank, these transactions will have no effect on the value of the australian dollar. endnotes [ * ] i thank dan fabbro and jarkko jaaskela for their assistance in preparing these remarks. an australian investor can swap australian dollars for us dollars in order to invest in us dollar - denominated assets. by using the swap, the investor is able to lock in an exchange rate at which the us dollars will be converted back into australian dollars in the future. this means the investor is not exposed to the risk that the us dollar will depreciate against the australian dollar. it is known that the supply of us dollars in swap markets at year - end is reduced by some large international banks in order to achieve a lower ( g - sib ) capital surcharge than otherwise ( fsb ( 2020 ), ‘ evaluation of the effects of toobig - to - fail reforms ’, consultation report, june ). these banks may also reduce their activities in swap markets in response to other factors such as leverage ratio regulations, taxes and deposit insurance assessment fees. for a discussion of the bank's past use of foreign exchange swaps, see robertson b ( 2017 ), ‘ structural liquidity and domestic market operations, rba bulletin, september, pp 35 – 44. information on recent use of foreign exchange swaps can be found in the rba annual report ( 2020 ). spot intervention by the bank has become less frequent as the market has developed, hedging foreign currency risk has become more efficient and as awareness of the benefits of a floating exchange rate regime has grown. nonetheless, the reserve bank has always retained the discretion to intervene in the foreign exchange market to address dysfunction and / or a significant misalignment in the value of the australian dollar. beginning with the release of data in march ( rba statistical table a4 ), additional information will be made available on the maturity of the bank's forward foreign currency commitments ( which includes commitments under swaps ). these long - term swaps will have an impact on domestic liquidity. however, if required, the bank could adjust its use of other instruments in domestic liquidity management to achieve desired outcomes. the materials on this webpage are subject to copyright and their use is subject to the terms and conditions set out in the copyright and disc