Impact of LSAT program on aggregate demand and government indebtedness

The LSAT program in New Zealand involved the Reserve Bank purchasing 50 billion in accounts of banks, paying the full OCR on those balances, which resulted in banks not being desperate to get rid of the balances. This is seen as an asset swap, where the government bought back a long-term bond and issued a short-term bond, with no change in the total amount of government indebtedness or spending. The floating rate securities issued to banks have not had a macroeconomic impact, but the overall monetary policy has had an impact.