Money Markets

Instruments and operations used in Exchequer cash management

Some of the principal instruments in which the DMO transacts for cash management purposes are set out below. Further details about these instruments, as well as the full range of instruments and operations that the DMO may use for cash management purposes, is set out in the Cash Management Operational Notice and Treasury Bill Information Memorandum which can be found here.

Cash deposits

The DMO may transact on an unsecured cash basis both as a lender and a borrower. Transactions may be entered into on a bilateral basis or, where the counterparty does not have an established relationship with DMO, through an acknowledged broker, subject to any appropriate due diligence and/or credit assessment.

Repo/reverse repo

Subject to the appropriate agreements being in place, the DMO may transact in repos and reverse repos of gilts and other selected securities with up to 12 months to maturity. These may be bilateral transactions or conducted through an intermediary trading platform, exchange or central counterparty.

Treasury bills

Treasury bills are used for both debt and cash management purposes. They are issued via regular weekly or ad hoc tenders, or bilaterally upon request from eligible cash management counterparties, subject to certain conditions. Further information can be found on the About Treasury Bills page.

DMO collateral pool

Gilts and/or Treasury bills may be issued to the DMO to assist in the efficient execution of its cash management operations. Any such issuances to the DMO will be used as collateral and will not be available for outright sale. Further information can be found in the Exchequer cash management remit within the Debt Management Report, which can be found here.

APF lending to the DMO (as at Q4 2025-26)

Gilts held in the Asset Purchase Facility (APF) are made available for on-lending to the market through a gilt lending arrangement between the Bank of England and the DMO originally announced in 2009.

The DMO may repo these gilts to its existing repo counterparties in accordance with its current terms and legal agreements.

As of Q4 2025-26, the following provisions apply to the availability of stock to the DMO under this arrangement:

•    The aggregate amount of the APF’s stock portfolio available to the DMO for on-lending purposes is 10% of the APF’s total nominal holdings. 

•    For gilts with a maturity date of less than three years, the maximum term that the DMO can on-lend to the market is three months. 

•    The maximum term of on-lending for gilts with a maturity date of three years or greater is one week. 

There are normally no further restrictions on the amount of an individual stock that is available for on-lending.

This arrangement is kept under review by the DMO and the Bank of England.